The European Bank for Reconstruction and Development (EBRD) is loaning Frontiers LLC, a Kyrgyz wholesale lender founded and owned by ACDI/VOCA, $1 million to support micro and small enterprise development in Central Asia.
Frontiers serves microfinance institutions (MFIs) by providing them with access to loan capital for on-lending to their clients. In addition to the loan, EBRD will provide $100,000 of technical cooperation funds to help develop Frontiers’s institutional capacity.
With the EBRD loan, Frontiers will be able to secure its position as a leading wholesale provider of finance to micro and small enterprises in Central Asia, where demand for finance is still much larger than supply. In addition to lending capital to MFIs, Frontiers also extends capacity- and transparency-building services to its clients, which tend to be smaller microfinance institutions and larger credit unions.
“Frontiers remains dedicated to serving and supporting the growing microfinance industry in the region by developing demand-driven financial products and services,” said Robert Fries, chairman of Frontiers's board and ACDI/VOCA senior technical advisor for financial services. “The EBRD’s support ensures that Frontiers, acting as a local wholesale financial institution, will continue performing its leading role in the development of the financial sector in Central Asia.”
In 2004 ACDI/VOCA established Frontiers in Bishkek as part of its USAID-funded Central Asia Microfinance Alliance project to create Central Asia’s only local wholesale lender to the microfinance sector. As a direct result of its strong growth and a commitment to cost containment, Frontiers became operationally self-sufficient well ahead of projections. In 2006 Frontiers started attracting commercial loans leading up to its recent EBRD loan award.
Through Frontiers, ACDI/VOCA's Central Asia Microfinance Alliance II project will consolidate the sustainability of the institution and help support it to serve small-scale microlenders throughout Central Asia. ACDI/VOCA will continue to provide support to Frontiers LLC by encouraging Frontiers to leverage its donated capital and attract alternative sources of funds and equity investors.
To read more about ACDI/VOCA's work in creating sustainable, long-lasting institutions, please click here.
To read EBRD’s news release, click here.