The Asian Development Bank (ADB), a Philippines-based multilateral institution, recently raised KZT 8.4 billion (USD 20 million) through bond sales to institutional investors in Kazakhstan to finance loans by the Housing and Construction Savings Bank of Kazakhstan, which is also known as Otbasy Bank. The bond has a 10-year maturity with a semi-annual coupon rate of 10.15 percent. It was issued by Tengri Partners, a Kazakhstan-based financial firm.
Otbasy is to on-lend the funds for home renovations and home purchases by women, largely in rural areas. The loan from ADB to Otbasy carries a guarantee from the Ministry of Finance of Kazakhstan. The funding is part of the Gender Equality in Housing Finance Project, through which ADB is investing a total of KZT 38 billion (USD 90 million) in Otbasy. In addition to funding mortgages, the project includes a research and public awareness campaign regarding housing finance for women in the country.
Pierre Van Peteghem, the treasurer of ADB, stated, “ADB is gratified to contribute to the development of Kazakhstan’s thriving capital markets. This inaugural tenge-denominated gender bond follows soon after our first green bonds last November and underlines the catalytic nature of ADB’s borrowing program in Asian local currencies.”
Otbasy is a unit of Baiterek National Management Holding, a state-owned bank. It aims to improve housing conditions in Kazakhstan by lending to customers partially based on the deposits that they maintain in the institution. Otbasy offers loans with periods of six to 25 years. As of 2021, its customers have aggregate deposits of KTZ 1.04 trillion (USD 2.4 billion), and the bank’s loan portfolio reached KZT 1.39 trillion (USD 3.3 billion). During 2020, the bank’s customers completed repayment on 51,000 contracts with a total value of KZT 171 billion (USD 406 million).
Established in 1966, ADB has 67 member countries. It works to reduce poverty and otherwise improve the quality of life of people in Asia through loans, grants, equity investments, guarantees and technical assistance. During 2019, ADB disbursed funds totaling USD 16.5 billion.
By Steffi Ong, Research Associate
Sources and Additional Resources
ADB press release
https://www.adb.org/news/adb-issues-first-gender-bond-kazakhstan-tenge
Otbasy homepage
https://hcsbk.kz/
About ADB
https://www.adb.org/who-we-are/about
About Promoting Gender Equality in Housing Finance Project
https://www.adb.org/projects/52334-001/main
Tengri homepage
https://tengripartners.com/
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