IFC, a member of the World Bank Group, is providing a senior syndicated loan of $82 million equivalent in Kazakh tenge to “Microfinance organization “KMF” LLC, a leading Kazakh microfinance institution, to boost lending to micro and small enterprises, including women entrepreneurs and customers in rural areas of Kazakhstan.
The investment comprises asenior loan of $10 millionfor IFC’s own account and a Hedged A-Loan Participation (HALP)of up to $72 million for the account of leading international investors, and is the largest ever deal in the microfinance sector of Kazakhstan. IFC uses the HALP, a syndication product allowing IFC to sell U.S. dollar participation in a local currency-denominated loan, to provide KMF with much needed local currency financing to support its growth while protecting the investors from currency risk. The group of committed investors consists of Invest in Visions GmbH; Incofin Investment Management; Triple Jump V.A.; MicroVest Short Duration Fund; Bank im Bistum Essen eG; Oikocredit, Ecumenical Development Cooperative Society U.A; and Symbiotics SA.
Shalkar Zhussupov, chairman of KMF's management board, said the company had significantly increased its outreach over the last two years by opening new offices in remote areas. Its client base has also expanded from 150,000 to 220,000 borrowers, with its credit portfolio increasing from 34 to 90 billion Kazakh tenge. “There is huge demand for additional financing and we are grateful to IFC for its helpin bringing investments to Kazakhstan to stimulate entrepreneurship and drive growth,” he said.
This is IFC’s second HALP project to date while the first HALP structure was used for KMF in 2017. Over the past several years, IFC has supported KMF with a range of financial products totaling$131 million equivalent in Kazakh tenge, including loans, risk management solutions as well as advisory services to enhance its corporate governance.