Thursday, April 4 2013 19:13
IFC helps Armenia's Inecobank support micro and small businesses spurring their growth
ArmInfo. Using a results-focused financing tool, IFC, a member of the World Bank Group, has helped Armenia's Inecobank increase lending to micro and small businesses, sparking economic growth and cutting poverty in rural areas.
The press service of Inecobank reports that IFC's performance-based grants have increased the bank's ability to provide microfinance by identifying lending gaps and changing policy to address them. As a result, Inecobank originated 101,160 microloans during 2010 to 2012, a significant increase from the previous three years, with 84 percent of the loans going to borrowers in rural areas.
"IFC has helped us achieve our ambitious target to mainstream microfinance into the bank's core operations and improve our ability to better serve small business owners and micro-entrepreneurs," said Avetis Baloyan, CEO of Inecobank. "At the same time, our cooperation with IFC has given us flexibility regarding how we deploy grant funds most effectively."
Thomas Lubeck, IFC Regional Manager for the South Caucasus, said, "IFC's innovative instrument, the performance-based grant, has helped Inecobank focus on microfinance, which is an important tool to improve livelihoods, especially underserved households in rural areas of Armenia. This cooperation is intended to benefit those who often find it difficult to access finance to modernize and expand their businesses."
This initiative is part of the IFC's Performance Based Grant Initiative, a new Advisory Services resource aimed at providing funding for results-oriented projects and developing innovative business models to expand access to financial services. These funds are given to projects that define measurable performance targets to be achieved by clients during implementation. Performance-based grants are used to incentivize and reward institutions that develop strategies to reach underserved segments.
Armenia became a member and a shareholder of IFC in 1995. Since then, IFC has invested $244 million in 40 projects across a range of sectors, including financial markets, manufacturing, and mining. IFC advisory services provide advice on the financial sector, sustainable energy, regulatory simplification, and food safety.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world's most pressing development challenges. For more information, visit www.ifc.org.
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