September 12, 2008
IFC to Support Expansion of CredAgro’s Microlending in Azerbaijan
Baku, Azerbaijan—IFC, a member of the World Bank Group, will support CredAgro’s microlending in Azerbaijan with two US dollar term facilities to benefit CredAgro’s microcredit and small enterprise customers.
IFC will provide a subordinated loan of $4 million with an 8-year tenor and an option to convert into the equity of CredAgro and a senior loan of $6 million with a 3-year tenor to CredAgro.
CredAgro is one of the leading non-bank microfinance institutions in Azerbaijan. These loans will support its expansion in financing micro and small enterprises throughout the country, particularly in rural areas. IFC is also considering an advisory services program to be provided to CredAgro to enhance its institutional capacity.
CredAgro indicated through a spokesperson that it is gratified by the IFC support, which will serve to improve livelihoods in Azeri rural areas and contribute to local financial market development. The IFC commitment of funds, complemented by advisory services, is welcome and fully in line with CredAgro’s and Azerbaijan’s economic development objectives.
ACDI/VOCA's Fred Smith, chair of the CredAgro Supervisory Board and participant in CredAgro’s establishment in July 2000 with funding from the U.S. Agency for International Development, said in Washington, “We are always pleased when one of the 13 financial institutions that we’ve founded finds such success. We are especially honored by the association with IFC in this case because it’s a further sign that CredAgro is an important player on financial market in Azerbaijan. We hope to see similar developments in other financial institutions affiliated with ACDI/VOCA.”
“IFC is pleased to continue supporting the development of Azerbaijan’s microfinance sector,” said Shahbaz Mavaddat, IFC director for South Europe and Central Asia, “Building viable microfinance institutions is a vital part of IFC's strategy in Azerbaijan, especially in the rural areas.”
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.
About CredAgro
CredAgro provides financial services to entrepreneurs and businesses with a focus on rural areas. The company upholds a dual mission of providing market-sustainable financial services to entrepreneurs and businesses in rural areas while furthering national economic development. CredAgro provides financing to rural people considered as “unacceptable” risks by traditional financial institutions or in areas where financing is not readily available. In 2006 it became independent of ACDI/VOCA. That year the Microfinanza Rating Agency rated CredAgro with a BBB grade, the highest grade among all financial institutions in Azerbaijan. The next year Azerbaijan’s Consulting & Business magazine presented CredAgro with the 2007 Ugur Award, (ugur means “success” in Azerbaijani) for its “contribution to the development of the agriculture sector.”
By operating a profitable lending business, CredAgro supports the economic development of Azerbaijan and demonstrates a sustainable business model that will enhance Azerbaijan’s microfinance industry. Through a network of 21 branches and sub-branches, CredAgro serves its clients in 30 rayons of Azerbaijan.
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