Solva raises $5 million from BlueOrchard

More than 83,000 entrepreneurs have used Solva services / Collage by Kursiv.media, photo editor: Aruzhan Makhsotova

OnlineKazFinance, a microfinance organization (MFO) operating under the Solva brand, has raised $5 million in the first tranche from the global investment fund BlueOrchard. The company will lend these funds to small and medium-sized businesses throughout Kazakhstan.

Before issuing the loan, BlueOrchard conducted due diligence, confirming that Solva fully meets the investment fund’s standards.

Since 2016, more than 83,000 Kazakhstani entrepreneurs have used Solva’s services. Over the past four years, the company has issued business loans totaling $2 billion. Interestingly, more than 70% of the company’s clients are female entrepreneurs. As part of its client-oriented approach, the MFO has been supporting the borrower rights ombudsman’s work since 2023. Solva has issued $8.3 million in restructured loans over the past 12 months.

According to a survey conducted by Solva last year among 1,200 respondents, every $2,000 loan facilitated small and medium-sized businesses in boosting their revenue by $12,500 on average over the next 12 months.

Solva is one of the leaders in the MFO market in Kazakhstan. As of June 1, 2024, it was ranked fourth in terms of assets ($225 million), according to the National Bank of Kazakhstan.

The company has been undergoing the process of transforming into a bank for several years. In June, Madina Abylkassymova, the chair of the Agency for Regulation and Development of the Financial Market, stated that the company’s application was rejected on several occasions because it did not meet official requirements for capital, among other reasons. In 2023, the MFO reported having a capital of $36.6 million.

At the end of 2023, Solva reported a significant decline in net profit, dropping from $7.7 million to $456,325. The company attributed these poor financial results to the transformation process, which is expected to be completed by the end of the year. Solva is controlled by Boris Batin, Alexander Dunaev and Neo Crystal Holdings Ltd (the UAE) as final beneficiaries.

BlueOrchard was established in 2001 by the UN as the first commercial business in the sphere of microfinance debt investments. Since its inception, the fund has invested about $11 billion in various financial institutions for 300 million small and medium-sized businesses worldwide.