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FIGHT OR FLIGHT?Maintaining a Focus on the Client During Times of Economic Stress

MFC Conference 2015

2

“Doing WellBy

Doing Good”

?

3

Income Growth* Year-over-Year has been Weak

Source: International Monetary Fund, World Economic Outlook Database, April 2015

GDP per Capita in National Currency, Constant Prices, Percent Change (2008-2017)

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Azerbaijan Kazakhstan Kyrgyz Republic Tajikistan

* Proxy for household income growth – using GDP per capita in LCY

4

Depreciation Against the US Dollar has been Steep

Source: oanda.com

FX Movements Against USD (2008 – 2015, Indexed to June 2008 Levels)

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1.9

2.1

2.3

6/1/

2008

9/1/

2008

12/1

/200

8

3/1/

2009

6/1/

2009

9/1/

2009

12/1

/200

9

3/1/

2010

6/1/

2010

9/1/

2010

12/1

/201

0

3/1/

2011

6/1/

2011

9/1/

2011

12/1

/201

1

3/1/

2012

6/1/

2012

9/1/

2012

12/1

/201

2

3/1/

2013

6/1/

2013

9/1/

2013

12/1

/201

3

3/1/

2014

6/1/

2014

9/1/

2014

12/1

/201

4

3/1/

2015

6/1/

2015

9/1/

2015

KZT

TJS

AZN

KGS

5

Prior Economic Crises have Impacted MFIs’ Financial Positions Negatively

Source: mixmarket.org

Average PAR > 30 Days, all MFIs reporting to the MIX (2006-2013)

Average ROA, all MFIs reporting to the MIX (2006-2013)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2006 2007 2008 2009 2010 2011 2012 2013

Azerbaijan Kazakhstan Kyrgyzstan Tajikistan

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2006 2007 2008 2009 2010 2011 2012 2013

Azerbaijan Kazakhstan Kyrgyzstan Tajikistan

6

Fightor

Flight

?