DUSHANBE, September 28, 2014, Asia-Plus – the International Finance Corporation (IFC) is providing a $10 million subordinated loan and $5 million senior loan denominated in Tajik somoni to Eskhata Bank to help expand access to finance for small and medium enterprises (SMEs), creating jobs and boosting shared prosperity in Tajikistan, IFC Dushanbe Office reports.
Although SMEs make an important contribution to Tajikistan’s gross domestic product and represent 60 percent of all employment, they reportedly struggle to gain access to banking services. IFC’s financing will enable Eskhata Bank to increase lending to SMEs, especially in agriculture and trade, the core sectors of the Tajik economy.
“The private sector is the engine of growth, and it must have access to finance if it can fulfill its role,” said Khurshed Nosirov, CEO of Eskhata Bank. “IFC’s long-term funding will help us increase the supply of affordable credit to more micro and small businesses, helping them grow and create jobs.”
K. Aftab Ahmed, Head of IFC EMENA Financial Institutions Group, said: “The limited availability of funding, especially in the local currency, constrains business opportunities for SMEs. This IFC investment will help Eskhata Bank meet the needs of SMEs in regards to long-term local currency funding.”
IFC’s relationship with Eskhata Bank dates back to 2005. Since then, IFC has extended a series of loans and trade finance lines totaling $25 million. IFC’s advisory services helped the bank strengthen its treasury operations and develop retail products.
Tajikistan became a member of IFC in 1994. Since 1997, IFC has invested $133 million to support 40 private sector projects in the financial, hydro power, retail, tourism, and manufacturing sectors.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, it uses its capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity. In FY14, IFC provided more than $22 billion in financing to improve lives in developing countries and tackle the most urgent challenges of development.
