Baku, Azerbaijan, June 13, 2013—IFC,
a member of the World Bank Group, is providing risk management support
to FINCA Azerbaijan, one of the country’s microfinance leaders, to hedge
part of its foreign currency borrowings into Azerbaijani Manat and enhance
its ability to increase access to funding for micro-entrepreneurs, particularly
in rural areas.
IFC has executed the first currency-forward
transaction with the notional amount of $10 million under an agreement
signed in April 2013. This will allow FINCA Azerbaijan to hedge its currency
risk in US dollars and continue lending through its large network of branches
serving over 140,000 entrepreneurs.
“We are delighted to deepen our partnership
with IFC, a strategic investor in both FINCA Azerbaijan and the FINCA network,
with this risk management transaction,” said Manish Sane, CEO of FINCA
Azerbaijan, a non-bank credit organization. “This deal enhances FINCA
Azerbaijan's ability to lend to its customers in local currency, while
effectively managing its currency risk exposure.”
Thomas Lubeck, IFC Regional Manager
for the South Caucasus, said: “IFC is delighted to support FINCA Azerbaijan
with risk management products. The purpose of this transaction is to remove
unnecessary currency risk, so the company can focus on its core business
– supporting small and micro-businesses in Azerbaijan.”
In 2011, IFC provided a $7 million senior
loan in local currency to FINCA Azerbaijan to increase access to finance
for micro and small business owners in remote and rural areas, helping
some of the region’s most vulnerable people.
Azerbaijan became an IFC member in 1995.
Since then, IFC has invested almost $393 million and mobilized nearly $73
million from other lenders in 67 projects in financial services, infrastructure,
and manufacturing. IFC has also implemented advisory projects focused on
private sector development. In addition, the State Oil Fund of the Republic
of Azerbaijan has committed $350 million to three funds managed by IFC
Asset Management Company that invest alongside IFC in private sector projects
in emerging markets.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. We help developing
countries achieve sustainable growth by financing investment, mobilizing
capital in international financial markets, and providing advisory services
to businesses and governments. In FY12, our investments reached an all-time
high of more than $20 billion, leveraging the power of the private sector
to create jobs, spark innovation, and tackle the world’s most pressing
development challenges. For more information, visit www.ifc.org.