IFC Helps Bai Tushum Transform into Commercial Bank

International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide advisory services to the Bai Tushum Financial Foundation, which was founded by ACDI/VOCA in 2000 and is now one of Kyrgyzstan’s leading microlending institutions. This support will help the institution transition into a commercial bank and expand its financial services to reach small Kyrgyz entrepreneurs. The signing ceremony was attended by Michel Mordasini, executive director from Switzerland of the IFC/World Bank Board of Directors.

This agreement follows a $2.2 million IFC financing package provided last year to Bai Tushum. Under the new agreement, IFC will assist with the company’s transition as well as wrap up work it began in 2005 to help Bai Tushum develop its leasing operations, policies and procedures.

Gulnara Shamshieva, general manager of Bai Tushum said, “IFC’s financing and advisory support will enable us to expand our financial services, especially in rural areas of the Kyrgyz Republic. This support will also aid the smooth transformation of our foundation into a commercial bank.”

The $300,000 advisory project will include training for Bai Tushum’s employees on risk management, microdeposit services, and internal controls and audits. The project is supported by the Netherlands Ministry of Foreign Affairs.

Gorton de Mond, IFC regional representative for Central Asia, said, “The Bai Tushum project reflects IFC’s strategy to strengthen local financial institutions and expand microfinance in the region to support private sector development. It is critical to provide support for smaller businesses, as they help boost the private sector and create jobs.”

Bai Tushum was established in 2000 by ACDI/VOCA with the support of CARITAS, a Swiss relief agency. It is one of a host of successful financial service institutions founded by ACDI/VOCA across Central Asia. Bai Tushum provides microcredit services to private entrepreneurs, traders, farmers, and micro and small agricultural enterprises. Its loans range from $500 to $30,000 and are denominated in the local currency. The institution recently received a merit award for financial transparency in a worldwide competition organized by the Consultative Group to Assist the Poor, a global resource center for microfinance standards.

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