INECOBANK INCREASES ITS OUTREACH TO MICRO AND SMALL ENTREPRENEURS BY JOINING THE IFC ARMENIA MICROFINANCE PROGRAM
ArmInfo
25.01.2010
ArmInfo. Inecobank CJSC and International Finance Corporation
(IFC), a member of the World Bank Group, signed a performance based
Grant Agreement according to which through a gradual, step-by-step
process, IFC will release up to $700,000 of performance-based grant
for INECOBANK reaching out to more than 71,000 new micro loans to
individuals and small entrepreneurs mostly in the rural areas of
Armenia. The press-service of INECOBANK told ArmInfo that the Project
will help the Bank to increase its outreach for the underserved poor
within the microfinance sector thus helping them to develop their
micro and small businesses and improve their living conditions.
During the Agreement signing ceremony Avetis Baloyan, the CEO of
INECOBANK said, "With the onset of the financial crisis, microfinance
proved to be one of the most sustainable products for the bank and as
one of its strategic sector priorities. Via participation in the IFC’s
Microfinance Initiative we are planning to significantly increase our
microfinance sector penetration and reach out the underserved markets,
particularly in the rural parts of Armenia. The project was welcomed
and supported by the Bank’s shareholders including DEG which, together
with CIM helped to bring on board of the Ineco’s management team an
expatriate Chief Strategy Officer, who helped the Bank to refine its
strategy." Jointly with IFC, INECOBANK developed an action plan that
outlines specific measures that need to be implemented to build up
the Bank’s capacity to provide micro loans, particularly in the rural
parts of the country.
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."
Microfinance has demonstrated its potential to assist the
micro-entrepreneurs to make significant strides towards reducing their
vulnerability, improving their livelihoods, paying for basic health
care and financing their children’s education. INECOBANK identified
microfinance as one of its priority tasks towards the fulfillment of
its mission and since the end of 2007 has been consistently working
towards the development of this initiative. The Bank demonstrated an
ability to provide financial services to poor people on a sustainable,
profitable basis and has built a good network of international partners
in microfinance development sector.
To recall, 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.
DEG, member of KfW Bankengruppe (KfW banking group), is one of the
largest European development finance institutions. For more than
40 years, DEG has been financing and structuring the investments of
private companies in developing and emerging market countries. DEG
invests in profitable projects that contribute to sustainable
development in all sectors of the economy and focuses also on
investments in the financial sector in order to facilitate reliable
access to capital locally. So far, DEG has worked together with more
than 1,500 companies and provided 4.7 billion euros of finance over
the past five years alone.
Inecobank CJSC is a universal bank founded in 1996 with the vision of
contributing to Armenia’s economic development and the improvement of
population of welfare. The bank is among the top 10 banks in Armenia
with the total assets of USD 130.5 mln. and capital of USD 25.8 mln.
as of the end of 2009. Among the shareholders of the Bank are IFC
(10% shares) and DEG (13.5% shares). The bank partners with reputable
international organizations such as EBRD, KfW banking group, OFID,
ADB, BSTDB, WB, SNS Institutional Fund, responsAbility etc.