- EBRD financing package of US$ 20 million to Bank Ipak Yuli
- Local currency lending for domestic SMEs
- Support for local exporters and importers
Small and medium-sized enterprises (SMEs) in Uzbekistan as well as domestic companies active in international trade will have additional funds available for their operations, thanks to a new financing programme offered by the European Bank for Reconstruction and Development (EBRD) to Bank Ipak Yuli, the country’s major privately owned lender.
The financing package of up to US$ 20 million will consist of two components: an SME credit line of up to US$ 15 million equivalent and a trade finance limit increase of US$ 5 million under the EBRD’s Trade Facilitation Programme (TFP) to build on the successful cooperation in the TFP area.
The former will be disbursed either in Uzbek som or in US dollars to cater SME needs. Providing funding in local currency will limit the risks that borrowers face with regard to exchange rates. The support of SMEs in Uzbekistan, where they create about 50 per cent of GDP and employ almost 80 per cent of the workforce, is particularly important for the EBRD and is one of its crisis response priorities.
The importance of trade has grown immensely since the outbreak of the coronavirus pandemic, as it helps firms to better manage commodity stocks and plan for longer trade cycles. A US$ 5 million TFP limit will help Bank Ipak Yuli to support domestic exporters and importers and to stimulate their business activity in the current difficult market conditions.
The financing programme for Bank Ipak Yuli demonstrates the confidence of international financiers in Uzbekistan’s financial sector and their commitment to supporting privately owned players in order to foster the sustainability and competitiveness of the sector.
The EBRD launched two Solidarity Packages in response to the coronavirus pandemic and now expects to dedicate the entirety of its business investments of up to €21 billion in 2020-21 to overcoming the economic impact of the crisis.
To date, the EBRD has invested €1.8billion through 81 projects in Uzbekistan’s economy.