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EBRD supports expansion of Nikoil Bank
Strengthening Azerbaijan's private sector through Finance package
The European Bank for Reconstruction and Development is supporting the
expansion of Azerbaijan’s Nikoil Bank with a $2 million loan and up to $1
million under the EBRD Trade Facilitation Programme (TFP). The loan will
promote the diversification of Nikoil Bank’s customer base by intensifying its
activities in the micro, small and medium-sized enterprise sectors. The trade
finance funds will help finance the development of related services.
Nikoil Bank will use the funds for lending to micro, small and medium-sized
enterprises and thus facilitate their access to finance. Nikoil Bank has
identified the diversification of its loan portfolio and the expansion of its
retail products and services as a top priority. Both will strengthen
competition in Azerbaijan’s banking sector.
Aygen Yayikoglu, head of the EBRD’s office in Azerbaijan, said the finance
package will further support the increase of financial intermediation in
Azerbaijan and promote competition on the domestic market. The EBRD’s
experience in similar transaction as well as its strong local knowledge will
help Nikoil Bank expand its business both in terms of customers as well as
products, one of which will be better trade finance through the $1 million TFP
facility.
The loan comes under the $80 million Multi-Bank Framework for Azerbaijan which
aims to assist local banks in the diversification of their funding base,
support their asset growth and stimulate lending to micro, small and
medium-sized enterprises. The framework receives financial support for
technical assistance from the EU Tacis programme.
A large increase in oil production and exports helped Azerbaijan achieve an
exceptional growth rate of 36 per cent last year. At the same time high
revenues have provided the country with financial means to support the
diversification of the economy to lessen the country’s dependence on natural
resources and to lay the foundations for sustainable growth. Successful micro,
small and medium-sized enterprises are seen as crucial to the development of a
stable and healthily growing economy.
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