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A boost for enterprises in Azerbaijan
EBRD loans to local banks will boost growth in small businesses
The EBRD is supporting the growth and expansion of enterprises in Azerbaijan with the provision of finance to two local banks.
Azerigazbank is receiving an $8 million credit line for on-lending to local micro, small and medium-sized enterprises and a $7 million credit line to provide medium-term financing to private companies which need larger loans.
Azerdemiryolbank will receive a $14 million credit line of which $4 million are earmarked for on-lending to small and medium-sized enterprises and $10 million will be made available to micro and small enterprises.
Azerbaijan’s economy grew by 27 percent in 2007 fuelled by oil and gas exports and new private enterprises are mushrooming in all sectors of the economy. The strengthening of micro, small and medium-sized enterprises is the key challenge to make the country’s growth sustainable and beneficial for the whole society.
The EBRD credit lines will allow the recipient banks to further grow their lending and expand into remoter areas of the country by increasing their branch networks. For local enterprises easier access to finance will allow them to better fulfil their growth potential for the benefit of the whole economy.
Kurt Geiger, EBRD Business Group Director Financial Institutions, said that the new projects with two banks in Azerbaijan would lead to a further deepening of the already strong involvement of the EBRD with the private banking sector in the country. “We are working with most privately-owned banks in the country and are proud to be associated with their rapid growth and adaptation to international business standards and best practice.”
Through its Azeri Financial Sector Framework, the EBRD works with 8 commercial banks and to date has lent over $80 million in support of micro and small businesses in Azerbaijan. From May 2008, the framework will increase both the amount and variety of medium-term funding available to a range of financial intermediaries including banks and non-bank financial institutions (e.g. micro-finance, mortgage, leasing or insurance companies). The product range will include all types of senior debt (e.g. SME, MSE, mortgage, syndicated, consumer, leasing), guarantees, subordinated debt, quasi-equity and equity investments.
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