The European bank for Reconstruction and Development (EBRD) is expanding its award-winning Women in Business program to Tajikistan, which will become the 17th country to benefit from improved financing and business advice for female entrepreneurs under the program.
According to the EBRD resident Office in Tajikistan, the Bank, which sees economic inclusion as one of the attributes of a successful modern economy, has allocated US$ 10 million to the Women in Business program in Tajikistan. As well as access to finance, the program will help women access the know-how they need to develop their businesses, through business advice, training courses in key entrepreneurial skills and a mentoring program.
Bank Eskhata is the first partner financial institution in Tajikistan to join the program, which is supported by donor funds through the EBRD Small Business Impact Fund. Eskhata will receive US$1 million equivalent in Tajik somoni for on-lending to women-owned or –led businesses across the country.
Other local banks and microfinance institutions are expected to join the program over the course of the next three years.
To date the EBRD has committed a total of €500 million to finance and advice for women-led or -owned businesses in 17 countries, now including Tajikistan.
Faced with limited private sector employment opportunities and substantial reductions from the public sector, Tajik women are increasingly looking at entrepreneurship as a viable source of income: 42 per cent of women are self-employed.
Women entrepreneurs nonetheless remain under-represented in enterprises of all sizes, and the bigger the firm the less likely it is to be headed by a woman. According to public records and various surveys only a third of firms have women among registered owners and only 8 per cent of firms have majority-female ownership. At the same time overall level of financial intermediation remains relatively low with very few men (13.9 per cent) or women (9.1 per cent) having bank accounts.
Women-led businesses face additional constraints from lack of dedicated financing products and customer service, as a result of which women are 3.5 times more likely to borrow from family and friends. Lack of financial literacy and business skills also leave women with less exposure to business opportunities and knowledge networks, meaning women-led businesses remain concentrated at the micro end of the spectrum, and most women remain patent-holders, a Tajik classification reserved to individual entrepreneurs running very small, simple businesses.
The new EBRD program in Tajikistan will provide dedicated technical assistance to participating financial institutions for development of female oriented customer approach and financing products. The EBRD will also provide financing to participating financial institutions, which will benefit from risk sharing components to make financing for female entrepreneurs more affordable.
Ayten Rustamova, EBRD Head of Tajikistan, said: “Tajikistan has some great examples of women in business, but access to finance for female entrepreneurs remains very constrained – even more so than for men who also struggle to receive bank loans for their businesses. We are very happy to launch the Women in Business program in Tajikistan, which will have several benefits: it will increase lending, business advice and also will help banks and microfinance institutions analyze what can be done to further support female entrepreneurial talent.”
CEO of Eskhata Bank, Mr. Khurshed Nosirov, said: “After years of successful cooperation with the EBRD on innovative financial products, including a pioneering climate resilience credit line, we are proud to be the first partner bank to join the Women in Business program.”
International donors will support the EBRD’s program in Tajikistan by providing funding for several elements, specifically first loss risk cover, the technical assistance to participating financial institutions and advisory support directly to women entrepreneurs (including work with international and local experts, training, mentoring and the analytical online platform Business Lens). €450,000 has already been provided via the EBRD Small Business Impact Fund, whose donors are governments of Italy, Korea, Luxembourg, Sweden, Switzerland, Taipei China and the USA.
To date, the EBRD has reportedly invested over €608 million (US$ 700 million) into various sectors of Tajikistan’s economy.
