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EBRD supports Micro and Small Enterprises in Kyrgyz Republic
Entrepreneurs receive support from $15.3 million facility to local banks
Noreen Doyle, First Vice President at the European Bank for Reconstruction and Development, today launched a $15.3 million facility to support the growth of Micro and Small Enterprises (MSEs) in the Kyrgyz Republic. The facility, co-financed by the Swiss government, the US government and the International Finance Corporation (IFC), will provide credit lines to Kyrgyz commercial banks for on-lending finance to local entrepreneurs in amounts ranging from $50 to $50,000.
Small businesses account for at least 60 per cent of the Kyrgyz work force, but financing via local Kyrgyz banks is still limited. Noreen Doyle said this facility would help to relieve part of that funding gap. InExim Bank is the first to sign under the facility and within the coming months the EBRD expects to expand this to include three new partner banks. Ms Doyle said small businesses are critical for economic development in the Kyrgyz Republic. As well as supporting local entrepreneurs, she said the facility should help to strengthen the country's banking sector, both of which are crucial for developing market economies.
The credit lines are twinned with technical assistance funds provided by the European Union and USAID to support the partner banks in developing efficient lending programmes. The funds will enable specialists to assist the partner banks in establishing departments specialising in micro and small enterprise lending, developing products in line with the requirements of entrepreneurs and train bank personnel in adequately assessing the repayment capacity of MSEs.
The facility is similar to the EBRD's Kazakhstan Small Business Programme created in 1998 to support small businesses in Kazakhstan. To date over 24,000 loans worth $160 million have been disbursed through that facility across the country, and around 700 banking professionals have been trained through technical cooperation funds. The EBRD's Board of Directors, representatives of the shareholders of the Bank, earlier this year approved a $75 million facility for the Kazakhstan Small Business Programme II.
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