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MCA BAI TUSHUM FINANCIAL FUND

An overview of BAI TUSHUM, a non-commercial public fund providing loans to farmers, entrepreneurs, and legal entities in rural areas. The fund aims to reduce risks in rural lending and promote sustainable financial practices. Performance indicators and financing sources are also discussed.

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MCA BAI TUSHUM FINANCIAL FUND

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  1. MCABAI TUSHUM FINANCIAL FUND Sustainability in Rural Finance May 2006 www.baitushum.kg

  2. BAI TUSHUM – An Overview • Chartered in October 2000 • Founders – ACDI/VOCA andCARITAS • TA Funding: USAID and SDC • Legal Status: Non-commercialPublic Fund, reregistered as MCA on February 13,2003,certified by National Bank • Three branches and 10 sub-offices www.baitushum.kg

  3. Loan Methodology • Loans to farmers, entrepreneurs and legal entities • Loan size: 250to36,000 dollars • Loan term is 12 - 18 months • Grace period is 6-11 monthsfor agricultural loans. • Market based interest rates www.baitushum.kg

  4. Loan Methodology • Individual lending under collateral • Rural and agricultural group lending ( max $500), solidarity responsibility • Lending group of clients under one immovable property www.baitushum.kg

  5. Challenges in rural lending • Influence of climate conditions • Failure of crops, plague of cattle • Unstable prices on production • Non-liquid collateral • Traditions www.baitushum.kg

  6. Reducing risks in rural lending • Flexible repayment graphic • Fast service • Well documented polices and procedures • Cooperation with rural authorities • Availability of additional income of clients • Diversification portfolio by agricultural products www.baitushum.kg

  7. Performance indicatorsas of on April 1,2006 • Loan outstanding- USD 7,717,000 • Active clients-4,014 • Operational self efficiency-131% • Financial self efficiency -126% • Repayment rate –99.27% • PaR>30 - 0.84% • Leverage ratio- 217% • Portfolio growth 2005- 95% www.baitushum.kg

  8. Growth of loan portfolio and number of clients www.baitushum.kg

  9. Number of disbursed loans www.baitushum.kg

  10. Financing • EBRD • IFC • Blue Orchard • Hivos-Triodos • Frontiers • Local commercial Bank ( hedging scheme) www.baitushum.kg

  11. Transformation& commercialization • December 2005- Microcredit Company was registered ,LLC • Assests&debts transfers • Equity investors • January 2008- MCC will be transform to MFC ( deposits taking), LLC will be transform to JSC www.baitushum.kg

  12. Strategic Objectives • Microfinance Company, deposit taking MFI • New products and services • Equity investment • Geographic outreach www.baitushum.kg

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