FIF - Fortuna Business MFO - MSME loan

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

The provision of a senior loan of up to US$ 4 million equivalent in the local currency (MSME loan) in favor of the Fortuna Biznes Mikromoliya Tashkiloti (Fortuna Business MFO) to support individual entrepreneurs and private micro, small and medium-sized enterprises (MSMEs) in Uzbekistan.

Project ID 54823

Status Approved

Location

Uzbekistan

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Elyorbek Mamatazizov
e.mamatazizov@fortunabiznes.uz
+998 73 244-40-00
https://fortunabiznes.uz
Fortuna Biznes Mikrokredit Tashkiloti LLC Fergana City, B. Marginoniy Street, Building 12, Zip Code: 150100

Project ID 54823

Status Approved

Location

Uzbekistan

Business Sector

Financial Institutions

Notice Type

Private

Environmental Category

Approval Date

02 Apr 2024

Disclosure date

04 Apr 2024

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project description

Project objectives

The MSME loan will allow Fortuna Business to diversify its funding base and expand lending to private MSMEs with a focus on attracting new clients and reaching borrowers in the regions of Uzbekistan. Up to 35 per cent of the loan will finance businesses led by women and up to 65 per cent of the loan will finance businesses outside of the capital.

The loan will be comprised of two equal tranches of US$ 2 million each. Tranche 1 will be committed upon signing the loan while Tranche 2 will be uncommitted and will be made available at the sole discretion of the Bank, delegated to the management and processed via the Banking Services circulation.

The transaction aligns well with the objective of the country strategy, which aims to ensure stronger role of SMEs in the economy through enhanced access to finance and capacity.

Transition impact

ETI Score:69

oject will be the first EBRD transaction in microfinance sector in Uzbekistan with MSME Loan contributing to Inclusive TI quality through financial inclusion for under-served market segments as well as Competitive TI quality through expanding Fortuna Business' MSME portfolio, with a focus on reaching regional clients and attracting new clients.

Client information

FORTUNA BIZNES MIKROKREDIT TASHKILOTI LLC

Fortuna Business is a privately-owned microfinance organisation (MFO) established in Fergana city, Fergana Region and operating since 2018. The MFO provides loans to local entrepreneurs and MSMEs and operates through eleven branches in six regions of Uzbekistan.

EBRD Finance Summary

USD 4,000,000.00

A two-and-a-half-year senior unsecured loan, with 12-month grace period, of up to US$ 4 million equivalent under the Financial Intermediaries Framework (FIF). The loan will be provided in two equal tranches (US$ 2 million each) in the synthetic local currency (Uzbek Sum).

Total project cost

USD 4,000,000.00

Additionality

Additionality for the proposed MSME loan stems from the provision of longer term funding to Fortuna Business that is otherwise unavailable in the market as well as the limited financing options for local regional MSMEs. Additionality will be achieved through a combination of:

Financing structure: the EBRD offers provision of a longer term financing that is currently not available from other commercial sources in the market.

Standard-setting: clearly defined eligibility criteria for sub-borrowers as well as compliance with the EBRD environmental and social standards, covenants and reporting requirements.

Knowledge, innovation, and capacity building: EBRD provides expertise, innovation, knowledge and/or capabilities that are material to the timely realisation of the project's objectives, including support to strengthen the capacity of the client through CA RSBP TC by regular workshops, e-learning and platform-based trainings.

Gender mainstreaming: Up to 35% of the loan will finance women led businesses to further enhance economic inclusion of women in Uzbekistan.

Environmental & Social Summary

Categorised FI (ESP 2019): Fortuna Business is a new Client and will be required to comply with PRs 2, 4 & 9, and further, implement and comply with the relevant EBRD's Environmental & Social (E&S) Procedures for financial institutions. Fortuna Business completed and returned the E&S due diligence questionnaire to ESD. Environmental and Social Due Diligence (ESDD) included a review of the E&S due diligence questionnaire and of the Borrower's current, Environmental and Social Management System (ESMS), which includes Environmental, Labour and Credit Policies. The ESMS is considered mostly aligned with Performance Requirement (PR) 9 and will reach full compliance with updates to refer to the ESP 2019 and the EBRD's Environmental and Social Risk Management Procedures for Corporate, SME and Micro Loans (as applicable) including the updated exclusion & referral list. Fortuna Business will also need to make necessary enhancements to comply with PR2 including updating its existing HR procedures to align with the ESP 2019. Fortuna will need to assign appropriate E&S resource to undertake the EBRD FI eLearning training. Fortuna Business will be also required to submit annual environmental and social reports to the Bank on compliance with the applicable Performance Requirements and any other E&S matters arising during the year. Sub-borrowers financed through Fortuna Business will be required to comply with national environmental, health, safety and labour (EHSL) requirements.

Technical Cooperation and Grant Financing

Fortuna Business will benefit from a TC support under the "Central Asia Regional Small Business Programme" (CA RSBP) benefitting from the access to the online platform consisting of training and will participate in in-class training sessions organised annually. The CA RSBP is funded by European Union: Sustainable Private Sector in Central Asia (IFCA III).

Fortuna Business will also benefit from the provision of non-financial services to be offered to their sub-borrowers. These services will be implemented under the EBRD's Advice for Small Businesses Programme, funded through the EBRD Small Business Impact Fund (SBIF). Contributors to this fund include Italy, Japan, Korea, Luxembourg, Norway, Sweden, Switzerland, TaiwanBusiness-EBRD Technical Cooperation Fund, and the USA.

The project will benefit from an associated TC component (titled "Generating awareness on unconscious bias and gender stereotyping in lending"), funded by the EBRD Shareholder Special Fund, to address inadvertent barriers that exacerbate women's challenges in accessing finance. Self-paced online training will be offered to the Client's loan officers on a voluntary basis to generate awareness of how unconscious bias and gender stereotyping can lead to sub-optimal credit decisions that can ultimately affect a financial institution's profitability.

Non-TC: The loan may benefit from the 12.5 per cent first loss risk cover at the EBRD's portfolio level under the SME Local Currency Programme funded by the EBRD SME Local Currency Special Fund.

Company Contact Information

Implementation summary

PSD last updated

04 Apr 2024

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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FIF - Fortuna Business MFO - MSME loan

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

Implementation summary

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)