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EBRD, IFC Join to Boost Micro and Small Enterprises in Central Asia
Entrepreneurs benefit from $147 million facility to local banks
The European Bank for Reconstruction and Development and the International Finance Corporation (IFC) are joining forces to enhance support for micro and small enterprises (MSEs) in Central Asia. The EBRD will provide US$102 million while the IFC initially contributes $45 million to finance small businesses in the region. The cooperation is supported by intensive technical assistance funds from the United States, the European Union, Japan and Switzerland.
Financing will be directed initially to four existing programmes: the Kazakhstan Small Business Programme, Kyrgyz MSE Finance Facility, Japan-Uzbekistan Small Business Programme and the soon-to-be-launched Tajikistan MSE Finance Facility.
Within the framework of these programmes, local banks are carefully picked that can provide swift and adequate loan products for MSEs, especially in the regions outside the capital cities. Funds from the EBRD and IFC will be used by these banks exclusively to finance MSEs in Kazakhstan, the Kyrgyz Republic, Uzbekistan and Tajikistan.
Elizabeth Wallace, EBRD Director for Small Business, said small businesses are critical for economic development in Central Asia and have proven to be dynamic and reliable partners in the existing programmes. As well as supporting local entrepreneurs, she said, the cooperation with IFC should help to further strengthen the country's banking sector.
Khosrow Zamani, IFC's director for Southern Europe and Central Asia, said: "This new programme will enable local banks to offer reliable, affordable sources of credit and other banking services that are essential to the growth of small business, which is critical to Central Asia's economic development."
This project builds on the existing EBRD programmes dedicated to MSE development in Central Asia, which have provided more than $250 million of finance to more than 40,000 entrepreneurs so far. EBRD and IFC's cooperation in Central Asia now helps to finance more than 2,500 MSEs each month in the amount of $12 million.
The EBRD aims to foster the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States. It is owned by 60 countries, the European Investment Bank and the European Community.
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