Microfinance institution Mol Bulak Finance (MBF) has received the first ever syndicated local currency (som) loan in the Kyrgyz Republic.
The syndicated loan, which was arranged by the EBRD, will be for the Kyrgyz som equivalent of USD 9 million comprising an A-loan for the EBRD up to USD 3 million and a B-loan for FMO (the Netherlands Development Finance Company) of up to USD 6 million.
MBF is one of the largest non-bank microfinance institutions in the Kyrgyz Republic and provides small loans in remote areas. It has a branch network of over 100 field offices and 81% of its clients are female. MBF focuses primarily on the poorer segment in the country, which is currently still underserved.
The loan will increase the availability of medium-term local currency lending to micro, small and medium-sized enterprises (MSMEs) in the Kyrgyz Republic, especially in the country’s remote rural areas, and help these companies avoid taking on currency exchange risks.
Local currency lending helps the Kyrgyz Republic build up local sources of domestic funding and reduce the use of foreign exchange in the country’s financial system. This is particularly important for microfinance institutions, which historically have received mainly foreign exchange funding, but have constrained hedging opportunities and remain limited by law to lend solely in local currency.
With a total exposure of more than USD 25 million FMO is an important player in the small but emerging Kyrgyz financial sector.
About FMO
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on four sectors that have high development impact: financial institutions, energy, housing, and agribusiness. With an investment portfolio of EUR 5 billion, FMO is one of the largest European bilateral private sector development banks. www.fmo.nl
Press contact:
Eveline Schijf, Communications Officer (PR)
T: +31 70 314 9924
E: e.schijf@fmo.nl
