In line with section 1.4.2 (iii) of the Directive on Access to Information, the Project Summary Document (PSD) for projects approved by Bank management under delegated authority will be disclosed at the start of the relevant no-objection notification period to a member country of the Bank, as per Article 13 (iii) of the Agreement Establishing the EBRD.
Project Overview
The European Bank for Reconstruction and Development (EBRD) has approved a senior unsecured loan of $2 million to Bailyk Finance under the FIF Youth in Business Programme for Central Asia (YiB CA). This funding aims to bolster Bailyk Finance’s capacity to support youth-led and owned micro, small, and medium enterprises (MSMEs) in Kyrgyzstan. The loan will help these businesses navigate the challenging market environment, diversify Bailyk Finance’s funding base, and introduce a new product offering both financial and non-financial services tailored to young entrepreneurs.
Project Objectives
The primary goals of this loan are to:
- Assist youth-led and owned MSMEs in enhancing their resilience and adaptability amidst market challenges.
Expand Bailyk Finance’s funding sources. - Develop and launch a new product designed to provide both financing and non-financial services, improving access to finance for young entrepreneurs.
- Transition Impact
ETI Score: 71
The project aligns with the objectives of the YiB CA programme, emphasizing inclusive and competitive qualities. It is expected to amplify lending to youth MSMEs, enhance Bailyk Finance’s capacity, and foster skill transfer to young business owners and managers in Kyrgyzstan.
Client Profile
Bailyk Finance Microcredit Company CJSC
Bailyk Finance, currently the third-largest microfinance institution in Kyrgyzstan, reported net loans totaling $57 million, assets amounting to $62 million, and equity of $10 million as of June 2024. The company maintains a regulatory Capital Adequacy Ratio (CAR) of 18 percent.
EBRD Financing Summary
Loan Amount: USD 2,000,000.00 (local currency equivalent)
Total Project Cost: USD 2,000,000.00
Additionality
EBRD remains one of the few institutions providing medium-term Kyrgyz Som (KGS) funding in Kyrgyzstan. The 3-year KGS funding is tailored to meet the demand for longer-tenor loans, particularly from youth entrepreneurs with investment needs.
Innovative financing features include:
First Loss Risk Cover (FLRC) and Result-Based Compensation (RBC): These instruments are designed to support Bailyk Finance by reducing collateral requirements and enhancing loan flexibility.
Capacity Building and Technical Cooperation: The Youth in Business Programme will provide extensive capacity building, including training and advisory support through the Advice for Small Businesses (ASB) Programme. The project will also include parallel contributions from Bailyk Finance, such as seminars and promotional activities for YiB-related products.
Environmental and Social Considerations
The project is categorized under Financial Institutions (FI) as per the EBRD’s 2019 Environmental and Social Policy (ESP). Bailyk Finance is required to comply with EBRD’s Performance Requirements (PRs) 2, 4, and 9, implement EBRD’s E&S Risk Management Procedures for SME and Micro loans, and submit annual environmental and social reports to the Bank.
Technical Cooperation and Grant Financing
A. Technical Cooperation (TC)
- Capacity-Building for Financial Institutions: EUR 4 million at the Programme level, confirmed.
- Capacity-Building for Youth MSMEs: EUR 6 million at the Programme level, confirmed.
B. Co-investment Grants / Concessional Finance
- Result-Based Compensation: Up to USD 60,000 (3% of the loan amount), confirmed.
Company Contact Information
- Lyubov Aramyan
- Email: [email protected]
- Phone: +996555900804
- Website: bf.kg
- Address: str. Fatiyanova 170, c. Bishkek
PSD Last Updated: September 20, 2024
Understanding Transition
For further details on the EBRD’s approach to measuring transition impact, visit the EBRD website.
Business Opportunities
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