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IFC Helps Regional Russian Microfinance Institution Hedge Currency, Interest Rate Risks


In Moscow:
Nezhdana Bukova
Phone: +7 (495) 411 3986
E-mail:
NBukova@ifc.org

In Washington, D.C.:

Aliza Marcus

Phone: (202) 473 8168

E-mail:
AMarcus@ifc.org


Moscow, Russia, October 23, 2009—IFC, a member of the World Bank Group, is helping FORUS Bank, a regional microfinance institution in Russia, hedge currency and interest rate risks to make its microfinance operations more sustainable.

IFC and FORUS Bank have executed currency and interest rate swap transactions for over $13 million, thus hedging the bank’s exposure to United States dollar, euro, and Russian ruble floating interest rates for a large part of its long-term international borrowings.  The two institutions signed the International Swaps and Derivatives Master Agreement on September 22—the first swap agreement signed by IFC in Russia.


“I am pleased that FORUS Bank has successfully completed the swap transactions with IFC, allowing us to hedge interest rate and currency risks on about 40 percent of our long-term liabilities,” said Stacie Schrader, Chairman of FORUS Bank’s Board of Directors. “They also will further stabilize the bank’s profitability while the Russian economy moves out of recession. I would like to thank our team and IFC for the timely completion of these transactions.”


FORUS Bank serves micro and small businesses in Russia, reaching more than 14,000 private entrepreneurs in 29 regions of the country.  The bank aims to meet the financial needs of its clients by creating credit-specific products, designing deposits that make it easier for entrepreneurs to save money for their business activity, and devising educational programs that help improve entrepreneurs’ level of financial awareness.


“IFC’s strategy on financial market is to help banks improve their sustainability and mitigate risks, including currency and exchange rate risks arising from the financial turmoil,” said Snezana Stoilikovic, IFC Director for Central and Eastern Europe. “I am very pleased to finalize our first swap transaction in Russia with FORUS Bank, our long-term client. The availability of microfinance is critical for sustainable economic growth in Russia.”


IFC is a leading global investor in microfinance with commitments of over $1.2 billion. In fiscal 2009, IFC’s microfinance clients disbursed 12 million microloans totaling $16 billion. IFC’s focus is on creating and supporting commercially viable microfinance institutions that can attract private capital. IFC plays a catalytic role by demonstrating the business case for commercial microfinance, enhancing the sector with innovative financial products, and promoting it as an asset class. IFC is working to ensure that microfinance reaches the people and places where it is most needed.


About IFC

IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org.

About FORUS Bank

Closed Joint-Stock Company FORUS Bank is a bank for micro and small businesses.  It was founded by
FORA Fund for Small Business Support, Russia’s largest microfinance organization.  The bank’s head office is located in Nizhny Novgorod, Russia, and it serves over 14,000 private entrepreneurs in 29 regions of Russia. FORUS Bank is a partner of Opportunity International network, MFC for Central and Eastern Europe, Russian Microfinance Centre, and is a member of the Association of Russian Banks. For more information, visit http://www.forusbank.ru/en/about/.