Tuesday, November 18 2014 17:58
IFC provides a $3 million loan to FINCA UCO to increase access to finance for micro and small businesses
ArmInfo. IFC, a member of the World Bank Group, is providing a $3 million loan to FINCA UCO, a leading microfinance institution in Armenia, to increase access to finance for micro and small businesses, helping them grow, create jobs, and promote shared prosperity. The relevant agreement was signed on November 18 by Hrachya Tokhmakhyan, General Director of FINCA UCO, and Manuel Reyes-Retana, IFC Portfolio Manager for Financial Institutions Group in Europe and Central Asia.
The loan, delivered in Armenian dram, will help FINCA expand lending to low-income entrepreneurs, especially in underserved rural areas, through its extensive network of branches across the country.
"In line with the company's mission, we continue to support micro entrepreneurs in Armenia," said Hrachya Tokhmakhyan, General Director of FINCA UCO. "This is IFC's second loan to FINCA and together with the ISDA Master Agreement signed today, it will help us make a difference in the lives of thousands of small entrepreneurs through local currency lending."
IFC provided its first local currency loan to FINCA UCO in 2013, enabling the microfinance institution to finance as many as 3,000 clients, up to 40 percent of whom were women entrepreneurs. 44% of the funds were placed in the agrarian sector. Actually, the new loan is the second tranche of IFC's credit line provided to the company in the amount of $7 million in the national currency.
"Credit availability is one of the key challenges for smaller businesses in Armenia. Our partnership with FINCA UCO is an important part of our strategy aimed at increasing financing of these enterprises," said Manuel Reyes-Retana, IFC Portfolio Manager for Financial Institutions Group in Europe and Central Asia. "These efforts can help create new opportunities for private sector development, improving the quality of life and reducing poverty in Armenia."
IFC and FINCA UCO also signed the International Swaps and Derivatives Association (ISDA) Master Agreement, which will help FINCA UCO enter into risk management transactions to reduce foreign currency risks and support its borrowers with effective management of their balance sheets which are mainly run in local currency. This is IFC's first ISDA agreement in Armenia with a non-bank financial institution.
When commenting on ArmInfo's question, Manuel Reyes-Retana said that at the moment IFC's investment portfolio for Armenia amounts to nearly $125 million and the number of programs is 50. The aggregate investments of IFC total about $22 billion.
FINCA UCO is a subsidiary of FINCA Microfinance Holding Company, owned and managed by FINCA International, one of the world's largest microfinance organizations. IFC is an anchor investor in FINCA Microfinance Holding Company.
Armenia became a member and shareholder of IFC in 1995. Since then, IFC has invested more than $320 million in 52 projects across a range of sectors, including financial markets, manufacturing, and mining. IFC Advisory Services provides advice through projects focusing 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. Working with private enterprises in about 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, we provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development.
FINCA UCO CJSC, a subsidiary of FINCA Microfinance Holding Company owned and managed by FINCA International, with headquarters in Washington, DC, operates in Armenia since 1999. FINCA Int. serves over one and a half million people through its subsidiaries in 22 countries of Africa, Eurasia, the Middle East and South Asia and Latin America. In Armenia, FINCA's portfolio reached $61.7 million and 56,000 active clients by the end of October 2014.
Expert critical of compulsory medical insurance 
Expert comments on medical insurance system in Armenia 
Mariam Hambardzumyan: Armenia`s education system not adapted to meet the needs of businesses
ATI.SU: Demand for international cargo transportation 30% up in Armenia
Civil Contract nominates Armen Ktoyan for Central Bank Board Member position
Armenia, France considering prospects for expanding technological cooperation