Project detail - Ameriabank CJSC - NASIRA PORTFOLIO

Who is our customer

Ameriabank is a privately-owned bank in the Republic of Armenia. The bank distinguishes itself by providing an extensive range of financial and advisory services through its omni-channel distribution, with a focus on the Corporate and Small and Medium-sized Enterprises (SME) segments. With a workforce of 1414 staff, (with 69% being female) the bank serves customers through its head office, 25 branches, 120 ATMs and >2,500 POS terminals. Ameriabank is an existing and longstanding client of FMO since 2009 and retains a leading position in the banking sector of the country, with a ~17.6% market share when measured by loan portfolio.

What is our funding objective?

The NASIRA Risk Sharing Facility (RSF) represents the next milestone to the well established partnership with Ameriabank. Through its controlled risk environment, the NASIRA RSF will bolster Ameriabank' s endeavors to expand its MSME portfolio. The facility places particular emphasis on empowering Young and Women entrepreneurs by supporting their income generating business activities, thereby aligning with FMO’s goal in Reducing Inequalities. The NASIRA transaction will support Ameriabank in achieving its strategic goal of growing its MSME customer base.

Why do we fund this investment?

Armenia remains a lower middle-income country (LMIC), as a vast part of its population (29%) lives below the poverty line. Despite the significant presence of MSMEs in the country, their contribution is only about 25% of the country's GDP and around 19% of employment, as the sector has limited access to credit. Due to this, MSMEs are fundamental to the overall socio-economic development of the country. FMO will be sharing directly the risk of the loan portfolio of MSMEs with Ameriabank, while 50% of the limit will be geared towards Young and Women entrepreneurs, hence qualifying for a 50% RI Label. As a result, the NASIRA RSF facility will incentivize Ameriabank to finance the underserved and marginalized communities in Armenia, thus supporting the country's economic development. Lastly, the transaction is additional as there are hardly any alternate products available in the market which offer similar portfolio protection as NASIRA does.

What is the Environmental and Social categorization rationale?

Ameriabank is categorized as FI-A (high risk) in accordance with FMO’s Sustainability Policy. Ameriabank’ s portfolio has a considerable exposure to large corporate clients as well as to sectors with potential significant and adverse environmental and social (E&S) risks such as such as agriculture, mining and quarrying, power, and oil and gas. Key potential impacts and risks related to the portfolio include soil, air, and water pollution, physical and economic displacement, poor labor and working conditions, and resource efficiency aspects. The Bank's E&S risk profile is not expected to significantly change in the short-term. Ameriabank' s E&S risks are managed through an existing Environmental and Social Management System (ESMS) operated by dedicated E&S specialists. As part of the transaction, Ameriabank is required to apply the EDFI Exclusion List, Armenia’s E&S laws and regulations, the IFC Performance Standards for applicable transactions, and to follow an agreed Environmental and Social Action Plan.

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Date	Total FMO financing
9/15/2023	USD 1.10 MLN