Under a US$10mn framework the bank will provide funds for on-lending to local financial organisations with a successful track record.
A US$2mn loan will enable Bai Tushum to extend more finance to farmers and small businesses throughout the country, as the fund specialises in agricultural and rural borrowing.
It was set up as a result of the merger between ACDI/VOCA and Swiss Caritas microlending programmes in 1997 and has disbursed over 10,000 loans worth more than US$15mn since. In the medium term, Bai Tushum seeks to transform itself into a deposit-taking corporation.
TaiwanICDF is supporting the new MFI framework with US$1.5mn, US$300,000 of which will be used for the support the loan to Bai Tushum. Technical assistance will also be made available from the ETC Multi-Donor Fund and will provide Bai Tushum with a range of consultancy services.
Daniel Berg, head of the EBRD’s resident office in the Kyrgyz Republic, says the bank has successfully implemented microlending programmes with a number of financial institutions in the country. Working with successful microfinance institutions such as Bai Tushum allows the EBRD to further expand and deepen its outreach, financing a wider and more divers range of clients.
Gulnara Shamshieva, CEO of Bai Tushum, adds: “The fund’s first medium-term loan from an international financial institution will enable us to fulfil our expansion plans. There is great demand for micro and small finance in the Kyrgyz Republic, particularly from farmers and other rural entrepreneurs.”