New EBRD financing for small businesses in Kyrgyz Republic

By Ina Coretchi

The EBRD is increasing the availability of financing to private businesses in the Kyrgyz Republic with a new credit line for on-lending to micro, small and medium enterprises (MSMEs).

The EBRD is providing a $5 million long-term loan to Kyrgyz Investment and Credit Bank (KICB) to help the bank diversify its funding base and develop further its portfolio of MSME credits. The loan agreement was signed today in the Kyrgyz capital Bishkek.

Since the beginning of its operations in 2001, KICB has gradually developed into one of the leading providers of term finance to MSMEs in the Kyrgyz Republic, and is currently one of the top five banks in the country.

The EBRD loan will enable KICB to finance investments and working capital of Kyrgyz businesses with medium and long-term loans, thus addressing the lack of credits available to micro, small and medium-sized companies in the country.

“In the current challenging economic environment small businesses are particularly affected, facing limited access to the much needed financing. This transaction reinforces the EBRD’s commitment to support the development of the private businesses in the Kyrgyz Republic as well as to strengthen the financial sector in the country,” said Kenji Nakazawa, Head of the EBRD office in the Kyrgyz Republic.

“KICB continues to play a strong role in the field of private sector financing, and this credit line is another important milestone in the bank’s development, as it allows us to expand the provision of medium and long-term financing to the MSME sector” said Mr. Kwang Young Choi, Chief Executive Officer of KICB. He pointed out that “the bank has achieved proven results in building strong credit portfolio and KICB will further support sustainable private sector companies”.

KICB was established in 2000 by a group of institutional investors led by Aga Khan Fund for Economic Development (AKFED), EBRD, International Financial Corporation (IFC), Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) and the Kyrgyz Government.

To date KICB has benefited from over $10 million in various financing facilities from the EBRD.

Since the beginning of its operations in the Kyrgyz Republic, the EBRD has committed over €185 million in more than 50 projects in the infrastructure, corporate, energy and financial sectors of the country’s economy, which attracted additional investments worth over €100 million.