IFC Helps Russian Microfinance Institution FORUS Bank

Microfinance Focus, Oct. 24, 2009: World Bank investment arm IFC is helping FORUS Bank, a regional microfinance institution in Russia, hedge currency and interest rate risks to make its microfinance operations more sustainable, said a press release.

IFC and FORUS Bank have executed currency and interest rate swap transactions for over $13 million, thus hedging the bank’s exposure to United States dollar, euro, and Russian ruble floating interest rates for a large part of its long-term international borrowings. The two institutions signed the International Swaps and Derivatives Master Agreement on September 22—the first swap agreement signed by IFC in Russia.

“I am pleased that FORUS Bank has successfully completed the swap transactions with IFC, allowing us to hedge interest rate and currency risks on about 40 percent of our long-term liabilities,” said Stacie Schrader, Chairman of FORUS Bank’s Board of Directors. “They also will further stabilize the bank’s profitability while the Russian economy moves out of recession.”

FORUS Bank serves micro and small businesses in Russia, reaching more than 14,000 private entrepreneurs in 29 regions of the country. The bank aims to meet the financial needs of its clients by creating credit-specific products, designing deposits that make it easier for entrepreneurs to save money for their business activity, and devising educational programs that help improve entrepreneurs’ level of financial awareness.

Closed Joint-Stock Company FORUS Bank is a bank for micro and small businesses, founded by FORA Fund for Small Business Support, Russia’s largest microfinance organization. Located in Nizhny Novgorod, it serves over 14,000 private entrepreneurs in 29 regions of Russia. FORUS Bank is a partner of Opportunity International network, MFC for Central and Eastern Europe, Russian Microfinance Centre, and is a member of the Association of Russian Banks.

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