OREANDA-NEWS. February 03, 2010. Inecobank CJSC and International Finance Corporation (IFC), a member of the World Bank Group, signed a performance based Grant Agreement according to which through a gradual, step-by-step process, IFC will release up to US700,000 of performance-based grant for INECOBANK for the development of its microfinance activities, mostly in the rural areas of Armenia, reported the press-centre of INECOBANK.

The Project will help the Bank to increase its outreach for the underserved poor within the microfinance sector thus helping them to develop their micro and small businesses and improve their living conditions.

During the Agreement signing ceremony Avetis Baloyan, the CEO of INECOBANK said, “With the onset of the financial crisis, microfinance proved to be one of the most sustainable products for the bank and as one of its strategic sector priorities. Via participation in the IFC’s Microfinance Initiative we are planning to significantly increase our microfinance sector penetration and reach out the underserved markets, particularly in the rural parts of Armenia.

The project was welcomed and supported by the Bank’s shareholders including DEG which, together with CIM helped to bring on board of the Ineco’s management team an expatriate Chief Strategy Officer, who helped the Bank to refine its strategy.” Jointly with IFC, INECOBANK developed an action plan that outlines specific measures that need to be implemented to build up the Bank’s capacity to provide micro loans, particularly in the rural parts of the country.

Georgina Baker, IFC Director for Global Financial Markets, said, “Microfinance has proven to be a critical tool in the fight against poverty.  Our support to INECOBANK will enable the bank to offer a variety of microfinance products to the businesses and individuals that have not had access to these services before, thus promoting growth and sustainable development in the country.”

The proceeds of the grant will be directed to assist the opening of new branches, integration of risk management and evaluation measures in microfinance and for training of microfinance specialists.

Microfinance has demonstrated its potential to assist the micro-entrepreneurs to make significant strides towards reducing their vulnerability, improving their livelihoods, paying for basic health care and financing their children’s education. INECOBANK identified microfinance as one of its priority tasks towards the fulfillment of its mission and since the end of 2007 has been consistently working towards the development of this initiative.   The Bank demonstrated an ability to provide financial services to poor people on a sustainable, profitable basis and has built a good network of international partners in microfinance development sector.