Arnur Credit was founded in 2001 as a Rural Credit Partnership and in 2004 it was transformed into a limited liability partnership and registered as a Micro Credit Organization (MCO). In 2006 Arnur Credit was sold to credit cooperative ORDA Credit LLP which is currently the sole owner of Arnur Credit.
ORDA Credit is a credit cooperative headquartered in Shymkent, southern Kazakhstan, and is one of the largest credit cooperatives in Kazakhstan. ORDA Credit was founded in 1999 and provides limited number of banking services to its members, such as lending, payment transactions and investment, in accordance with the Credit Partnerships Law.

The proposed project involves a senior loan from IFC’s own account to Arnur Credit in an amount up to $3 million equivalent. The proposed loan would be denominated in the Kazakh Tenge.

3.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	3.0
Equity

* These investment figures are indicative

Arnur Credit is headquartered in Shymkent in southern Kazakhstan and has 38 branches and sub-offices in the southern region.

The developmental impact is expected to be high:

- Open up more financial channels to the underserved segments of the society in remote and rural areas of Kazakhstan through supporting lending operations of Arnur Credit. Through access to finance, local micro and small entrepreneurs, more specifically women owned borrowers, would be able to expand their business activities and subsequently finance their day to day consumer and family needs.

- Contribute to the employment creation and improvement of life at the base of the pyramid through the strengthening of the microfinance industry in the frontier regions of Kazakhstan.

- Create a demonstration effect for MFIs in the country to upgrade their practices in different areas including risk management and social and environmental risk management.

IFC''s additionality can be summarized as follows:

- Enhance Arnur Credit''s ability to achieve anticipated growth through improving their chances to access medium-term funding that has become scarce. IFC''s term loan would provide the necessary funding to continue the growth of the Company and support its expanded product offer to local entrepreneurs.

- Provide local currency funding and help Arnur Credit reduce its foreign currency exposure, support the Company''s efforts to diversify and increase the volume of its funding, better manage assets and liabilities and improve its risk profile.

- Support the development of the microfinance industry in Kazakhstan by supporting and building a long-term relationship with a successful and growing MFI in the Country and reinforcing the Company''s focus on serving more customers, expanding its outreach in rural and low income regions and promoting sustainable best practices in the microfinance sector.

The proposed project is with the new IFC client to provide a senior loan of up to US$3 million equivalent to Microcredit Organization Arnur Credit LLP to finance the expansion of the Company’s lending activities to micro and small entrepreneurs. The project has been classified as category FI according to the IFC Environmental and Social Review Procedure. Arnur Credit will be required to update the Exclusion List it currently applies to include items on IFC Exclusion List, to develop and operate an Environmental and Social Management System (ESMS), and to appoint an ESMS officer to run the system. The ESMS shall be commensurate with the level of E&S risks in its portfolio and prospective business activities and ensure screening operations of borrowers against the IFC Exclusion List and, where they present E&S risks, for compliance with environmental and social laws and regulations of the Republic of Kazakhstan, where they exist and are applicable. Arnur Credit will also need to demonstrate ongoing compliance with IFC Performance Standard 2: Labor and Working Conditions in its employment practices and regularly report to IFC its E&S performance in accordance with the format to be provided by IFC.