The European Bank for Reconstruction and Development (EBRD) is lending US$ 6 million equivalent in local currency to FINCA Azerbaijan for on-lending to micro, small and medium-sized enterprises (MSMEs) in Azerbaijan.
The EBRD’s facility will help FINCA Azerbaijan to further expand its lending operations, contributing to the development of MSMEs in the country. It will also allow the clients of FINCA Azerbaijan to take medium-term loans in local currencies, thus avoiding currency exchange risks.
The loan to FINCA Azerbaijan aims to support the development of local microfinance activity, while satisfying the growing demand for financing from MSMEs in the country.
FINCA Azerbaijan is the largest microfinance institution in Azerbaijan in terms of number of clients. With 65 branches, it enjoys wide geographic coverage across the country, lending primarily outside of Baku. The company has been an EBRD client since 2006 and has received US$ 24 million worth of financing, with its current outstanding exposure from the EBRD at US$ 18.5 million, all in local currency.
“Local businesses will benefit greatly from this facility in the current economic environment, in which there are limited sources of local currency, medium-term financing. This transaction reinforces the EBRD’s commitment to supporting the development of private businesses in Azerbaijan as well as to further strengthening the financial sector,” said Neil McKain, Head of the EBRD Resident Office in Baku.
“We’re thrilled to expand our long-term partnership with the EBRD, our primary provider of local currency funds for our clients,” said Timothy Tarrant, Country Director of FINCA Azerbaijan. “We see many opportunities for further cooperation with the EBRD in the sector, and we look forward to new initiatives to support sustainable business lending in Azerbaijan.”
The EBRD has been active in Azerbaijan since the country’s independence. To date the Bank has invested in 143 projects with over US$ 2.2 billion in various sectors of the Azeri economy.