The EBRD is providing micro finance company Frontiers with a US$1mn loan to support micro businesses in the Kyrgyz Republic and Tajikistan. The loan will be complemented by US$100,000 of technical cooperation funds to assist the institutional development of the company.

Frontiers was set up by ACDI/VOCA – a US-based private, non-profit organisation that promotes economic growth and social advancement in more than 40 countries worldwide – in 2003 as a limited liability company with US$3mn start-up capital.

The Bishkek-based company provides finance to non-banking financial institutions in Central Asia for on-lending to micro and small enterprises.

Frontiers had initially been financed almost entirely with USAid grant money, but in 2006 the company started attracting commercial loans. Its goal is to become a leading wholesale provider of finance to micro and small enterprises in Central Asia, where demand for finance is still much larger than supply. With its loans, Frontiers also provides educational support to strengthen the institutional development of its clients which tend to be smaller microfinance institutions and larger credit unions.

Masaru Honma, EBRD Director for Central Asia, says Frontiers fills a gap in the current financial systems of Central Asia and the EBRD is looking forward to working together with its new partner for the benefit of the private sector in the region.

At the same time the bank’s funding will enable Frontiers to attract further commercial funding to implement its impressive business plan over the next few years.