The 'B+' rating indicates that the Upper Kama small business assistance fund Business Partner is a sufficiently creditworthy business entity, with a low degree of full or partial debt restructuring risk. The rating assignment was based on the Credit Rating Methodology for Microfinance Institutions rev. January 23, 2014.

We appreciate the conformity of all standard performance metrics of the microfinance institution to regulatory requirements and its profitable operations as the positive rating drivers.

Over the period under review, all the standard performance indicators stayed at an acceptable level. As of April 1, 2015, the lending efficiency was estimated at 87%, increasing by 15 p.p. over the 12-month period preceding the review. Operational efficiency ratio ranged from 1.1% to 3.3% over the last five reporting quarters and was 1.8% at the beginning of the second quarter of 2015. It should also be noted that the write-off ratio and the portfolio-at-risk (PAR) ratio (in terms of the Ministry of Economic Development) were equal to 0% owing to the ability of all 35 current borrowers to timely and fully meet its obligations to the Fund.

The Fund's operations have been profitable since the second quarter of 2014. According to the Fund's reports, its profit totaled RUB 46.8 thousand in the first quarter of 2015, RUB 69.6 thousand in 2014. As a result, the operational sustainability ratio exceeded 100% in the period under review (118.3% as of April 1, 2015).

The key factor constraining the Fund's final rating is the low capitalization.

As of April 1, 2015, the market capitalization of the microfinance institution was RUB 16.7 million. Undercapitalized entities have to face heightened risks related to both financing and the macroeconomic situation in the region. 

Full Fund name: The Upper Kama small business assistance fund Business Partner.

Short name: Business Partner Fund

Business Partner Fund has been engaged in microfinance activities since 2013. It was included in the state register of microfinance institutions under no. 401303333004206 on October 31, 2013.

AK&M Rating Agency assigned a credit rating to Business Partner Fund for the first time on June 18, 2014. All rating action announcements are available on the akmrating.ru website.

The rating is valid until July 2016. AK&M Rating Agency may revise the rating and/or the outlook during this period if circumstances fundamentally influencing the microfinance institution's creditworthiness are revealed.

For estimation purposes, we completely rely on the reliability of information provided by the Fund. The rationale for AK&M Rating Agency's judgment on the rating may include information acquired from other sources we deem to be reliable; however, the agency does not check the input data exhaustively and disclaims all responsibility for their possible errors.

This press release is based on the Statement of assignment of a microfinance institution credit rating to Business Partner Fund and the Credit Rating Methodology for Microfinance Institutions rev. January 23, 2014.

The rating, along with any information and conclusions provided in this press release, only conveys our creditworthiness opinion and shall not be construed as a recommendation to purchase or sell securities, or to lend funds.

AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.

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