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EBRD supports microfinance in Tajikistan
$4 million loan to The First MicroFinanceBank
The EBRD is extending its successful programme to support micro and small
enterprises in Tajikistan by providing a $4 million loan to The First
MicroFinanceBank (FMFB). Although it is one of the youngest commercial banks
in the country, FMFB has a broad regional outreach. The bank is particularly
effective in extending credit to rural areas in which there is limited access
to financial services.
The loan comes under the Tajikistan Micro and Small Enterprise Finance
Facility (TMSEFF), established in 2003 and expanded in 2006, to provide loans
to micro, small and medium-sized enterprises. Since the establishment of the
facility more than 18,000 loans with an average value of $3,000 have been
provided by end-2006. Loans to female entrepreneurs constitute 41 per cent of
the portfolio. Because of its strong rural focus, FMFB provides even smaller
average loan sizes of around $1,000 and by working with this dedicated
microfinance bank, the EBRD will be able to deepen its outreach. The loan will
also help to broaden the impact of EBRD funds – in 2006, FMFB itself disbursed
almost 10,000 loans.
A central activity under the TMSEFF programme is capacity and institution
building at the partner banks. The UK’s Department for International
Development together with USAID and the EU has provided technical assistance
funds for institution building in the banking sector. Additionally, the Swiss
government through SECO and the EBRD’s Early Transition Countries (ETC) Fund
have contributed to the programme. Assistance to FMFB will be tailored to meet
its needs, and technical assistance will be provided by the ETC Multi Donor
Fund.
Fernand Pillonel, head of the EBRD’s office in Tajikistan, said the loan to
FMFB will enlarge the financial resources of the bank and help it to expand
its lending activity further to the remotest regions of the country. This in
turn will significantly increase the outreach of the microfinance facility and
assist in satisfying growing demand for access to finance.
Jim Egan, CEO of FMFB, said that the confidence shown by the EBRD in lending
to the bank is testimony to its successful activities in the Tajik banking
sector. The unique mandate of FMFB will be greatly facilitated by the EBRD’s
loan and will be used to finance future growth and expansion in both rural
mountainous regions and urban centres.
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