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General Director,  Micro Credit Company "FINCA”

Yuriy Shulhan CEO of FINCA Micro Credit Company in Kyrgyzstan (FMCC), who has over 12 years of banking and microfinance experience in Eastern Europe, the Balkans and Central Asia, holds a Systems Engineering degree from Lviv Polytechnic Institute in Ukraine, a PhD degree in Economics at the Academy of Sciences of Ukraine and is completing his 3rd and final year at the Graduate School of Banking at the University of Pennsylvania, USA. He has been managing FMCC since 2006.

FINCA (Foundation for International Community Assistance) is a non-governmental organization based in Washington that provides microfinance services in more than 20 countries of the world.
FINCA's mission is to provide financial services to the world's lowest-income entrepreneurs so they can create jobs, build assets and improve their standard of living.
With wholly-owned subsidiaries in Africa, Eurasia, Latin America and the Greater Middle East serving over 700,000 clients, FINCA's geographic reach is among the widest of the leading microfinance networks. FINCA's birthplace was in Latin America in 1984, and that region remains the largest in terms of clients served. But the programs in Africa, Eurasia and the Greater Middle East are growing rapidly, evidence that microfinance works in very different markets and cultures.
FINCA created its program in Kyrgyzstan in 1995. Since its inception FMCC has focused on client growth, geographic outreach, financial sustainability and institutional development. In an effort to formalize its operations, in July 2003 FINCA's program in Kyrgyzstan was incorporated as a joint stock company under the laws of Kyrgyzstan, taking the name “FINCA Micro Credit Company” (FMCC), and certified to operate by the National Bank of Kyrgyzstan.

-  During the past two years, FINCA has managed to gain the status of the country's most dynamic loan provider among all the Microcredit financial institutions (MFI) operating in Kyrgyzstan. What are the milestones of your success?

FINCA is the largest microfinance institution in Kyrgyzstan in terms of client outreach and geographic coverage. Through its NBKR-licensed Micro Credit Company (FMCC), FINCA serves over 72,000 clients running a portfolio of about $41M, employing over 700 staff and operating countrywide from its 86 offices (as of May 1, 2008).

Constant market research and regular monitoring of client needs, followed by a quick response to all relevant changes in the local market enable FINCA to make the most competitive offers that help retain existing clients and attract tens of thousands of new ones.
A lot of effort, particularly in the past year, was focused on the improvement of lending terms and conditions. This target was successfully achieved through the implementation of a new incentive program with improved credit terms for loyal clients; the introduction of three new loan products: individual AgroLoan, innovative group loans for start-up businesses and individual loans to legal entities.

Regional expansion and penetration to some of the country's most remote towns and villages was another great milestone  as of today the company has 86 offices countrywide, two times more than at the beginning of 2007. With such impressive expansion, the number of staff has also significantly increased. In connection with this, last year FMCC developed new recruitment technologies and in cooperation with the country's leading universities invited the best graduates to undergo training with FINCA and then apply for a job.

-  Banks in Kyrgyzstan began to compete for your clients by providing products that are currently offered by your program; how is your company addressing this type of competition?

There is competition from local banks in Kyrgyzstan, especially when it comes to providing individual loans. Different microfinance providers specialize in different niches. In order to retain our market niche, FINCA continues to work with simple, client-driven lending procedures and serves clients in remote areas where traditional financial institutions and banks refrain from operating. In addition, FINCA continues to meet the needs of its clients by constantly introducing new loan products.

-  What is your estimation of the impact FINCA has made on the country's economy?

Microfinance is widely recognized as an effective tool in overcoming and reducing poverty  and has become part of the National Poverty Reduction Program.

FINCA Kyrgyzstan's micro-credit program has had positive social and economic effects for clients.  One of the indicators of positive impact is job creation. The average job creation for our clients is 0.6 per client. In addition, once a year we conduct the FINCA Client Assessment Survey, where we compare the well-being of our current clients with the well-being of new clients. This research shows that FINCA loans appear to have enabled clients to increase their household consumption and well-being. Those clients participating in FINCA Kyrgyzstan programs have a higher rate of higher education attendance among university aged children in client households, as well as a higher expenditure per university student in each household as compared to new clients. In terms of business improvement, current FINCA clients have greater weekly sales and have created more new jobs than new FINCA clients. "Just one figure - since its inception in Kyrgyzstan in 1995 until May 2008 FINCA has granted over 740,000 loans to Kyrgyz micro and small entrepreneurs  a figure that speaks for itself."

-  What are your priorities for future development?

By the end of 2008, FMCC plans to enrich its portfolio with an additional 20 thousand clients and continue to target entrepreneurs in urban, semi-urban and rural areas. FINCA will continue to deepen its penetration in existing markets by opening new rural branch offices to bring services to hard-to-reach rural populations. 
We are also preparing to receive a Banking License from the NBKR, which will allow significant diversification of financial products and the ability to better meet the growing needs of our clients. 14 out of 20 FINCA programs worldwide either collect or are licensed by their respective Central Banks and plan start collecting savings.
The rationale behind establishing a full-fledged FINCA bank in Kyrgyzstan (FBK) is the further development of FINCA's 13-year credit only activity in the country, satisfying its clients' growing demands in savings and remittances.
FBK shall position itself as a financial services powerhouse offering a full range of financial services with particular focus on the low income population of Kyrgyzstan. It will excel on service quality, proximity to the client, and the highest levels of transparency already achieved by the FMCC.

FBK will cultivate the image of an international institution with prominent international shareholders and investors. FBK will exploit current FINCA market advantage in terms of national FMCC branch coverage and the well-established FINCA brand name.

FINCA strives to be a “banker with a soul”. We believe we can create the best of both worlds: sustainable, financially sound programs that serve the working poor. Our experience proves we are right.

-  Why is your membership in AmCham very siginficant?

 I would like to express our appreciation for the important role AmCham plays in building a platform for strong business relationships and creating a sense of camaraderie and shared experiences. Active participation and cooperation in AmCham's operation is also really useful for its members by way of promoting and protecting their business interests, and obtaining high-quality business information and resources. Promoting a healthy business environment in Kyrgyzstan and increasing the investment attractiveness of Kyrgyzstan are also extremely important.
-  Finally, what would you like to wish AmCham Kyrgyzstan members?

 I would like to wish AmСham Kyrgyzstan members continued success in their business endeavors and personal lives.

Discovery AmCham Kyrgyz Republic #3/2008


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