International Finance Corporation – Azerbaijan and Central Asia Micro and Responsible Finance Project

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Project Status: Active
Project at-a-glance
Project Name Azerbaijan and Central Asia Micro and Responsible Finance Project
Sector/Subsector Finance
Country Kyrgyz Republic
Project Opening Date 2013
Project Closing Date Present
Responsible Institution
Responsible International Financial Institution International Finance Corporation
Objectives
Strategic Agenda

To support microfinance institutions in Azerbaijan and Central Asia, help their corporate transformation processes, and generally improve the regulatory framework for microfinance in the region.

Description
  • The goal of the project is to support microfinance institutions in Azerbaijan and Central Asia, help their corporate transformation processes, and generally improve the regulatory framework for microfinance in the region. The project helps develop a broader range of financial services and increase access to finance for micro entrepreneurs across the region. The project works with Smart Campaign to introduce a certified responsible finance program.

IFC helps microfinance institutions based in Central Asia:

  • To develop from credit-based institutions to providing their customers with a broader range of financial services. Normally these services would include taking deposits and could also require the profiling of institutions before they are able to obtain a full banking license.
  • To introduce new financial products such as microsavings, microinsurance, microleasing, mobile banking, and currency transfer by microfinance institutions.
  • To introduce a certified responsible finance program.
  • To increase awareness about the microfinance sector in Azerbaijan and Central Asia both locally and abroad, convince policy makers of the benefits of microfinance by highlighting the development impact and social performance, and promote new financial products.

IFC provides solutions by developing a package covering two broad areas:

  • The first involves institutional capacity building, developing financial management, assets and liabilities management, the development of new products, risk management, internal audit and control, and HR.
  • The second is focused on corporate strategy and mentoring like advice on structuring equity transactions, corporate planning, investor presentations, investor relations, and funding strategies.
  • This process is not appropriate for every MFI, but it is aimed at those that have reached a point in their development where such a transformation makes strategic sense.

Impact to Date (as of January 2014)

  • The project has advised eight microfinance institutions in Central Asia on institutional capacity building to support their transformation processes and introduce responsible lending initiatives.
  • The project has facilitated $60 million direct foreign investments in microfinance institutions in Central Asia.
  • Eight microfinance institutions in Central Asia joined SMART Campaign, a certified responsible finance program.

IFC supported the creation of the first microfinance bank in the Kyrgyz Republic. The National Bank of Kyrgyz Republic issued a banking license to Bai-Tushum and Partners, an IFC investment and advisory client, enabling it to become the first microfinance bank in the country. IFC advised Bai-Tushum throughout the transformation process, helping it to improve internal controls, information technology, investor relations, and product marketing.

IFC helped the National Bank of Kyrgyz Republic to improve legislation on the transformation of microfinance institutions into deposit-taking organizations and commercial banks. This will make it easier for other microfinance institutions to follow Bai-Tushum’s example.

The project completed extensive research on financial literacy in the country.

Source of Funding
  • International Finance Corporation
  • The government of Switzerland
Amount of Funding N/A
Project Outcome

Support of microfinance institutions in Azerbaijan and Central Asia.

Business Opportunities
Consulting Services

N/A
For possible business opportunities visit eConsultant2

Procurement

N/A
For possible business opportunities visit eConsultant2

Contact Information of International Financial Institution
Organization/Department International Finance Corporation
Name Zarina Odinaeva
Address Business Center Orion, 4th floor, 21 Erkindik Boulevard
Province/State Bishkek
Postal Code 720040
Country Kyrgyz Republic
Phone +996 (312) 626 162
E-mail

ZOdinaeva@ifc.org

Website

www.ifc.org

Contact Information of Project Implementer
Organization/Department Osh Vodokanal
Name Talant Baikishiev
Address 256, T. Tursunbaevoj Str.
Province/State Osh
Postal Code 723500
Country Kyrgyz Republic
Phone +996 (3222) 81150
E-mail

talant_osh@mail.ru