Micro Finance Bank of Azerbaijan ends 2007 with record results

In 2007 the total assets of MFBA increased by 141% and reached USD 133 million at the end of December, compared to USD 55.4 million in December 2006. This increase was primarily financed by over USD 60 million in new funding secured by MFBA in 2007 from various international financial institutions and investors, which included two historic transactions. In August USD 11.4 million in 5-year bonds, providing senior debt to MFBA, were issued through a Luxembourg securitization vehicle. These were the first bonds to be issued to international capital markets for Azerbaijan and for a single microfinance institution. Furthermore, in December MFBA secured the first loan from an international private-sector financial institution denominated in Azerbaijan’s local currency, the Manat. The AZN 4.2 million loan (approximately USD 5 million) was received from the SNS Institutional Microfinance Fund. In such a way MFBA is playing a leading role not only in the development of small business in Azerbaijan but also in the development of international capital market confidence in the Azerbaijani banking sector.
The growth of the bank in 2007 was also financed and supported by a capital increase completed in April, which raised MFBA’s share capital to AZN 11 million (approximately USD 13 million). All five existing shareholders participated in the capital increase as well as a new, sixth shareholder, Access Microfinance Holding – a microfinance strategic investor.
This was reflected in the growth of MFBA’s loan portfolio which increased by 140% to USD 114 million from USD 47,6 million in December 2006. The number of clients with outstanding loans nearly tripled during the year and ended 2007 at 47,683, compared to 16,719 at at the end of 2007. In total, after five-years since its birth, MFBA has granted 98,000 loans for over USD 274 million, including over 66,000 loand for over USD 250 million to micro and small businesses in Azerbaijan. Consequently MFBA is fulfilling its mission and is making a leading contribution to the development of micro and small business, creating new employment and developing the economy of Azerbaijan.
A notable step for the development of the non-oil sector of the economy of Azerbaijan and the credit business of MFBA in 2007 was the development and launch of MFBA’s new Agroloan product in August. This product is now in great demand, especially in MFBA’s regional branches in Sheki, Gandja, Lenkoran and Khachmaz. In less than five-months since its launch over two thousand agricultural businesses have received loans for over USD 3.6 million.
The Retail and Operations side of MFBA’s business also posted high growth. The deposit portfolio increased by 280% and reached USD 14 million. Money transfer turnover also rapidly increased and reached a level of USD 11 million per month. And MFBA’s plastic debit card business is also developing – in 2007 MFBA passed chip certification and the bank will start issuing clients with embedded chip cards early in 2008.
Four new branches were opened in 2007, taking the number of branches to 14 covering Baku, Sumgayit, Gandja, Sheki, Lenkoran and Khachmaz. And in 2008 MFBA is planning to open branches in several more regions of Azerbaijan.
The growth of the bank also creates new professional employment opportunities. During 2007 the bank recruited more than 200 new young employees – for most of whom this was their first professional employment experience. The total number of employees of the bank reached 640.
Lastly, it is also worth noting that in May MFBA received an “Alpha” rating from M-CRIL an specialist Microfinance Rating Agency. Awarding the “Alpha” rating M-CRIL highly recommended the bank to international investors and recognised the ‘strong leadership’ in the bank, the ‘excellent management systems including MIS’, and ‘good asset quality and diversified portfolio.’