The EBRD is providing further support for the development of the private sector and the diversification of economy in Azerbaijan with a credit line for micro, small and medium enterprises.
The Bank is providing a $13 million loan to Azerdemiryolbank (ADB) to finance operations of privately owned micro, small and medium enterprises operating in Azerbaijan with credits worth up to $1 million.
The global financial crisis has led to a reduction in liquidity levels in the Azeri banking sector, which has forced commercial banks to withdraw or significantly reduce credit lines to customers. The difficulty in obtaining credit is hindering the growth of the non-oil economy in Azerbaijan, affecting particularly small and medium businesses.
The EBRD loan to ADB will help the bank maintain the availability of credit to the real economy in the current difficult environment. To date, the EBRD has provided ADB with over $50 million in equity investment and loans. ADB is also actively involved in Trade Facilitation Program provided by the EBRD to assist the bank to further develop its trade finance services.
ADB is a leading independent bank in Azerbaijan, with 32 branches and more than 500 staff. Due to its wide regional presence, ADB will be able to continue providing medium-term financing in underserved areas of Azerbaijan.
“Through this transaction the EBRD is promoting increased competition in the banking sector in Azerbaijan, which is still dominated by state-owned banks. Moreover it will ensure a continuous flow of much needed credits to the real economy, helping to further develop the private sector and diversify the Azeri economy”, said Nick Tesseyman EBRD Director for Financial Institutions.
Since the beginning of its operations in Azerbaijan, the Bank has committed more than $800 million to the Azeri economy through 90 projects in the infrastructure, corporate, energy and financial sectors. The EBRD funds attracted additional investments of $2.1 billion in Azerbaijan.