In Kazakhstan, PROPARCO is supporting KMF, a microfinance institution very active in rural areas

published on 05 August 2020
Kazakhstan
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Client de l'institution de microfinance KMF
By allocating KMF a loan in local currency (Kazakh tenge) equivalent to USD 15m, PROPARCO is reiterating its support to a major microfinance player whose clients are mainly rural dwellers.

In Kazakhstan, microfinance institutions (MFIs) play a key role in rural areas where people often have difficulties accessing the resources they need to finance their activities. As with the loan allocated by PROPARCO in 2017 in tenge, equivalent to USD 10m, this new loan will allow the microfinance institution to continue to support the economic and social development of populations that are underserved by traditional financing, especially in rural areas.

Supporting a flagship MFI that reconciles an economic rationale and social benefit, in particular for women

KMF is the country’s leading microfinance institution. It has over 220,000 borrowers and over 110 retail outlets located in 12 of the 14 regions in the country. KMF has an excellent reputation with its clients – it is client protection certified (Smart Campaign) – and mainly operates in rural areas, which account for over 65% of its clients. KMF is recognized in the highly competitive microfinance segment in Kazakhstan for the range and quality of its products: the loan characteristics, the time it takes to appraise loan requests and its interest rates.

KMF mainly serves women, who account for over 55% of its clients, and has established an active policy for them. It organizes events (annual “Women in Business” conference) and promotes knowledge-sharing, the exchange of experience and network development (seminars and training for KMF’s women entrepreneur clients). Furthermore, 51% of its employees and 75% of its top management are women: KMF therefore meets most of the 2X Challenge criteria.

During the current Covid-19 crisis, PROPARCO’s support to KMF will allow this recognized microfinance institution to continue to promote its model focused on rural communities and women in a more difficult operational context.

A project supporting financial inclusion and employment

By supporting the growth in KMF’s activity with its Kazakh clients, PROPARCO’s  loan should lead to the allocation of about 9,150 additional microcredits.

“The support provided to KMF’s expansion should help create or maintain some 4,000 direct or indirect jobs over the next 5 years, with over 50% of them held by women” said Mr. Shalkar Zhussupov, KMF Chairman of the Management Board.

The project will contribute to SDG 8 “Economic growth and decent employment”, SDG 5 “Gender equality” and SDG 10 “Reduced inequalities”.