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Second credit line for Tajik small business finance
Tajiksodirotbank gets $2 million facility one year after launch of EBRD programme
A year after launching the $7 million Tajik Micro and Small Enterprise (MSE)
Finance Facility with the help of international donors and following the
successful financing of 1,500 Tajik businesses so far, the European Bank for
Reconstruction and Development has granted its second credit line to a local
bank to boost the financing of small businesses in this Central Asian country.
On Tuesday in Dushanbe, the EBRD and Tajiksodirotbank marked the signing of a
$2 million credit line. This bank was one of the original partners of the
Tajik Micro and Small Enterprise Finance Facility launched by the EBRD last
year. In line with EBRD’s objectives, Tajiksodirotbank had until now mobilised
its own funds to provide $1.3 million in loans to 500 Tajik micro enterprises.
The EBRD credit line will enable Tajiksodirotbank to expand its lending to
MSEs.
In all, the EBRD’s three local partner banks have lent $3.8 million to 1,500
Tajik business people under the facility since its launch. The EBRD’s first
credit line, for $1 million, was signed with Eskhata Bank in February. The
third bank involved, TajPromBank, has so far also been lending its own funds.
It is donor financing from the international community which has enabled local
Tajik banks to use their own funds to make micro and small business loans
available to their clients. In addition, grants from the United Kingdom’s
Department for International Development, USAID and the US Government, and the
European Commission have financed the use of EBRD consultants to train the
staff of Tajik banks in the techniques of micro-lending.
The finance facility is also underpinned by the Swiss government, which,
through its State Secretariat for Economic Affairs, provides a risk-sharing
scheme to support EBRD loans to local commercial banks.
Almost all the clients benefiting from the EBRD programme have never had
access to finance before. Micro loans are disbursed to commercially viable
private enterprises both in dollars and Tajik somoni. Over time it is
envisaged to widen the range of loan products as clients grow and partner
banks gain confidence in this vibrant market segment.
The EBRD programme has so far been operating in Dushanbe and two cities in the
northern Sogd region, but is now ready to spread to the south of Tajikistan.
Kurgan Tube and TursanZade will be the first outposts of the programme in the
South, and further expansion to new cities and more remote areas will continue
in 2005 through both current and potential new Tajik partners.
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