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New EBRD funding for Uzbek micro, small businesses
$5 million loan for Uzjilsberbank under joint programme with Japan
The European Bank for Reconstruction and Development is lending $5 million to
Uzbekistan’s Uzjilsberbank under a programme set up in cooperation with the
Japanese government to give micro and small businesses access to easy and
affordable credit throughout this Central Asian country.
The loan is the third made to an Uzbek commercial bank for on-lending to local
clients since the EBRD and Japan set up the Japan-Uzbekistan Small Business
Programme in three years ago with $20 million in funding.
Nearly 7,000 loans worth a total of $15.5 million have been provided to 4,500
micro and small enterprises since the programme’s launch in 2001.
For more than 90 per cent of these borrowers – ranging from single person
businesses to small manufacturing plants – these loans represent their first
experience of borrowing from a bank. The default rate on these loans is less
than 1 per cent.
The EBRD is also contributing technical assistance to the three Uzbek
commercial banks taking part in the programme, Uzjilsberbank, Hamkorbank and
Pakhta Bank, to help them set up specialised micro and small-finance
departments. Over 20 are by now up and running throughout the country.
Preparing a new generation of loan officers from scratch is a key element of
the programme, and 100 trainees are currently in full-time training.
The EBRD is also working with the Uzbek government with the aim of widening
the programme’s regional outreach and making formal bank finance more
affordable for Uzbek businesses.
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