NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, February 24, 2015

Kompanion Financial Group, one of the largest microfinance institutions in the Kyrgyz Republic both by loan portfolio and number of clients, has concluded an equity raise selling a 35% stake to international investors. The shares were purchased by Netherlands based investors FMO and Triodos Investment Management, with the latter investing through Triodos Fair Share Fund and Triodos Microfinance Fund. Kompanion’s founder Mercy Corps will remain majority shareholder and hold a 65% stake. The funds will be used for growth capital in the lending operations and support Kompanion’s transformation to a licensed banking institution.

Kompanion Financial Group was founded by Mercy Corps in 2004 as a community development financial institution and currently serves over 115,000 clients through a network of 125 offices across the Kyrgyz Republic. With a focus on group lending to women in rural areas, Kompanion provides a range of loan products to support agricultural and livestock production as well as for business, consumer and housing purposes.

Kompanion’s CEO, Ulanbek Termechikov commented, “The capital increase and attracting Dutch investments to the financial sector of Kyrgyzstan is one of important stages of the company’s development. Kompanion will continue to support the strengthening and growth of communities by offering development products and services to the population of Kyrgyzstan.”

The new investors have a long history in institutional microfinance investing and bring a wealth of experience to enhance Kompanion’s operations and governance.

Mrs. Linda Broekhuizen, Chief Investment Officer at FMO, said: “We are delighted to work together with Kompanion, which is committed to the development of low-income communities. With a big part of the Kyrgyz population still living in poverty, Kompanion’s approach to community development finance contributes significantly to the economic and social development of the Kyrgyz population. We look forward to making economic, but also social and environmental impact with a strong partner such as Kompanion.”

Rosanna Sarkeyeva, Senior Investment Officer at Triodos Investment Management, commented: “Kompanion has a strong rural focus on the unbanked population of Kyrgyzstan and is recognized in the sector for its environmental and social initiatives. Kompanion aims to utilize this capital to support its growth strategy, largely comprised of transforming into a fully-fledged bank. Our goal is to provide continued support and governance to Kompanion as the company continues to be a market leader in inclusive finance and embarks onto the next stage of its institutional development.”