July 19, 2008
Frontiers LLC Celebrates Fifth Anniversary
Applause filled the room as the audience raised a toast to Frontiers LLC’s five years of lending on July 18. Clients from Kazakhstan, Kyrgyzstan and Tajikistan gathered in Kyrgyzstan to honor Frontiers staff, its board of directors and themselves for the successful establishment of a unique lending program begun by ACDI/VOCA through a USAID grant.
In addition to the celebration, Frontiers’ anniversary brought its board of directors to Bishkek to hold a strategic planning session for the staff and to create a five-year plan of action. Frontiers’ plan is to expand its outreach to 2 additional countries and grow its portfolio to $100 million.
The creation of Frontiers was an initiative–spurred by demand–to fill the lending gap left by local banks and international lenders, which were not lending to small and medium-sized credit unions, microfinance institutions and agricultural cooperatives. ACDI/VOCA recognized this gap when, in 2002, it crafted its unsolicited proposal to USAID that would eventually fund Frontiers. In August 2004, under the Central Asia Micro Finance Alliance project, ACDI/VOCA established Frontiers LLC, the region’s only locally based wholesale lender to the microfinance sector, in Bishkek, Kyrgyzstan. While most international lenders look to provide loans in the range of $1 million, Frontiers’ average loan size is $115,000, enabling them to reach clients with limited access to external sources of funding.
As a direct result of its strong growth and a commitment to cost containment, Frontiers became operationally self sufficient well ahead of projections. Today Frontiers boasts a portfolio of over $10 million to finance organizations in Central Asia. It has proven its commitment to helping clients meet the challenge of running a small business in the region. Beginning with slightly over $3 million in loan funds from USAID, Frontiers has been able to borrow against this equity from a variety of international lenders and create a range of loan products that include larger loans for on-lending as well as small, fixed asset loans. Frontiers staff maintains strong relationships with clients, beginning with site visits and continuing with monthly visits to identify problems and provide guidance. Frontiers has been the first lender to most of its clients and has taught them how to increase efficiencies, improve internal systems and repay loans.
Frontiers has always been a distinctive project for ACDI/VOCA. As a for-profit institution, Frontiers is wholly owned by ACDI/VOCA and is dedicated to the expansion and development of financial institutions across Central Asia. Frontiers is managed by a team of dedicated Kyrgyz staff and governed by a board of directors composed of former and current ACDI/VOCA staff, including board chair Bob Fries and board members Fred Smith, Janice K. Stallard, Jeff Singer, Zakir Abdrashitov and Patricia Gates.
For more information on ACDI/VOCA’s work in financial services, click here here.