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Strengthening the Kyrgyz corporate sector
$3 million EBRD loan to Demir Kyrgyz International Bank
The EBRD is providing a $3 million loan to Demir Kyrgyz International Bank (DKIB) for on-lending to companies in the Kyrgyz Republic who increasingly are in need for larger loans. The size of each sub-loan will be up to $3 million and the EBRD will finance up to 50 percent of $1.5 million.
The loan comes under the Medium Sized Co-Financing Facility for Early Transition Countries to assist successful local commercial banks to overcome lending constraints and strengthen them by enabling them to arrange and manage larger loans. The facility also responds to growing demand from local enterprises.
Established in 1997, DKIB has developed into one of the leading players in the Kyrgyz banking sector and is currently the country’s seventh largest bank by total assets. The bank is particularly active in the corporate sector, including small and medium-sized enterprises. The EBRD holds a 15 percent-stake in DKIB.
Kenji Nakazawa, Head of the EBRD Resident Office in Bishkek, said that the “EBRD loan will increase the competitive strength of DKIB. Because long term funds are still very difficult to obtain on the local banking sector, this will in turn serve medium scale Kyrgyz companies in their endeavours to satisfy their funding needs.”
The EBRD’s Early Transition Countries Initiative, launched in April 2004, currently includes Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, Moldova, Mongolia, Tajikistan and Uzbekistan. Using a streamlined approach to financing medium scale private sector enterprises, the Initiative is aimed at mobilising more investment, and encouraging economic reform. EBRD activities in these countries are growing rapidly with around 100 projects alone in 2007.
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