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EBRD supports Azerbaijan micro and small enterprises
Azerbaijan first bank dedicated to small businesses opens its doors to customers in Baku
Small businesses in Azerbaijan will have access to finance as a result of the opening of the new Microfinance Bank of Azerbaijan (MFBA), supported by the European Bank for Reconstruction and Development. Additional finance has been provided by the International Finance Corporation (IFC), BSTDB (Black Sea Trade and Development Bank) and LfS Financial Systems GmbH. EU TACIS provided 1.8 million in technical assistance (TA) to cover start-up expenses. The EBRD invested
USD 1.25 million in MFBA's equity capital and is planning to provide a loan of USD 5 million to MFBA for on-lending to micro and small enterprises (MSEs).
The bank will provide a range of financial services to MSEs, including commercial loans as well as other banking services, such as current and savings accounts, international payment transactions and foreign currency services. The bank will focus on loan applications from small companies and entrepreneurs, providing loans ranging from USD 250 to USD 100,000. Following today's opening of its headquarters in Baku, MFBA will open branches and outlets elsewhere in Azerbaijan in due course.
The creation of MFBA is an important element of Azerbaijan's Poverty Reduction Strategy, recently agreed with international financial institutions. The bank will serve as a dependable source of credit for small businesses, which play a crucial role by providing new employment and income-generating opportunities. They also improve the quality and quantity of products and services available to the population, promoting entrepreneurship and fostering the diversification of Azerbaijan's economy, said Noreen Doyle, EBRD's First Vice-President.
The EBRD is one of the largest investors in Azerbaijan, with investment commitments of 330 million in sectors as diverse as MSEs, financial institutions, property, oil and gas, water supply, power generation and transport infrastructure.
The EBRD has financed MSEs in 16 countries. To date, MSE programmes have disbursed over 1.7 billion to 222,000 MSEs. MFBA will replicate the highly successful microfinance banks already established in Albania, Bosnia and Herzegovina, Bulgaria, Georgia, FR Yugoslavia (Kosovo), Romania, Russia and Ukraine.
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