Yerevan, January 26, /ARKA/. IFC, a member of the World Bank Group, said in a statement it is helping Armenian INECOBANK expand its microfinance capacity to increase access to microfinance for small entrepreneurs and low-income individuals, mostly in Armenia’s rural areas, promoting growth and sustainable development.
In cooperation with IFC, INECOBANK is expected to strengthen its capacity to reach Armenia’s people, most of whom have limited access to microfinance. IFC has introduced an innovative form of support, performance-based grants structured in tranches, whereby clients are rewarded for achieving development targets. Through a gradual, step-by-step process, IFC will release up to $700,000 of performance-based grants for the bank, making more than 71,000 new micro loans to individuals and small entrepreneurs, mostly in rural areas of Armenia.
“With the onset of the financial crisis, microfinance proved to be one of the most sustainable products for the bank and one of its strategic sector priorities,” said Avetis Baloyan, INECOBANK’s CEO. “Through participation in the IFC’s Microfinance Initiative, we are planning to significantly increase our microfinance sector penetration and reach out to the underserved markets.”
Georgina Baker, IFC Director for Global Financial Markets, said, “Microfinance has proven to be a critical tool in the fight against poverty. Our support to INECOBANK will enable the bank to offer a variety of microfinance products to the businesses and individuals that have not had access to these services before, thus promoting growth and sustainable development in the country.”
IFC’s expanded cooperation with INECOBANK is part of IFC’s regional crises response program. It also is in line with IFC’s strategy for Armenia, which entails supporting the most vulnerable segments of the population by helping microfinance institutions.
IFC is a shareholder of INECOBANK, holding 10 percent of its shares. In 2006, IFC provided INECOBANK with a $3 million loan to expand mortgage finance, and in 2008 provided a $3 million financing package to expand access to finance for small and medium enterprises in Armenia. IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. Along with IBRD, it is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including by supporting microfinance institutions benefitting small businesses and low-income individuals in Armenia.
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.
Founded in 1996, INECOBANK CJSC is a universal bank with the vision of contributing to Armenia’s economic development and improving population welfare. It is among the top 10 banks in Armenia, with the total assets of $130.5 million and capital of $25.8 million, as of the end of 2009. The bank’s shareholders include IFC (10 percent shares) and DEG (13.5 percent shares), and it partners with reputable international organizations such as EBRD, KfW Bankengruppe, the OPEC Fund for International Development, and the Asian Development Bank. -0-
