Azerbaijan, Baku, June 13 / Trend E. Aliyev /
IFC, a member of the World Bank Group, is providing risk management support to FINCA Azerbaijan, one of the country's microfinance leaders, to hedge part of its foreign currency borrowings into Azerbaijani Manat and enhance its ability to increase access to funding for micro-entrepreneurs, particularly in rural areas, the company said today.
IFC has executed the first currency-forward transaction with the notional amount of $10 million under an agreement signed in April 2013. This will allow FINCA Azerbaijan to hedge its currency risk in US dollars and continue lending through its large network of branches serving over 140,000 entrepreneurs.
"This deal enhances FINCA Azerbaijan's ability to lend to its customers in local currency, while effectively managing its currency risk exposure," Manish Sane, CEO of FINCA Azerbaijan, a non-bank credit organization, said.
"The purpose of this transaction is to remove unnecessary currency risk, so the company can focus on its core business - supporting small and micro-businesses in Azerbaijan," Thomas Lubeck, IFC Regional Manager for the South Caucasus, said.