DUSHANBE, February 9, 2015, Asia-Plus — The European Bank for Reconstruction and Development (EBRD) is expanding its support for rural areas of Tajikistan through providing a new loan to microcredit deposit-taking organization FINCA LLC.
According to the EBRD Dushanbe Office, the multi-currency loan equivalent to US$ 4 million, will be used by FINCA to increase financing for micro and small businesses mainly outside the capital, in regions underserved by banks.
FINCA reportedly has a strong presence across the country, serving clients through its 36 branches and service outlets in central, northern and southern Tajikistan.
Since its establishment in 2003, FINCA has mainly been serving smaller microfinance borrowers with an average loan size of around US$ 1,100.
The EBRD has been working with FINCA in Tajikistan since 2012, providing a total of US$ 7 million for on-lending to local small businesses. The Bank also works with FINCA in Jordan, Kosovo and Russia as well as other countries in Central Asia and the Caucasus.
Richard Jones, Head of the EBRD Resident Office in Dushanbe, said: “The funding will help FINCA Tajikistan to further expand its lending operations, contributing to the development of micro and small enterprises in the country. It will also allow local borrowers, whose revenue streams are predominately in somoni, to take medium-term loans in local currency, thus eliminating currency exchange risks.”
“We believe that our rural customers in particular, as well as their families, will benefit greatly from FINCA’s increased ability to meet their somoni loan demand. We are very thankful for the ongoing trust and cooperation with the EBRD,” said Jana Chmelnizki, General Director of FINCA Tajikistan.
The US$ 4 million equivalent loan to FINCA Tajikistan for on-lending to micro and small businesses will be the second under the Early Transition Countries (ETC) Non-Bank Microfinance Institutions Framework. The framework aims to strengthen microfinance institutions in countries that are in the early stages of transition to open market-oriented economies. Loans are provided for on-lending to the smallest borrowers across the ETC countries: Armenia, Azerbaijan, Belarus, Georgia, the Kyrgyz Republic, Moldova, Mongolia, Tajikistan and Turkmenistan. The facility is accompanied by a technical cooperation framework funded by multi-donor funds.
Since the beginning of its operations in the country, the EBRD has invested close to US$ 320 million in Tajikistan across many sectors of the economy.
