The provision of a senior unsecured loan of USD 1.5 million in favour of Arvand Bank (Arvand). The proceeds of the loan will be channelled by Arvand to local micro and small enterprises (MSEs). This project was approved as part of the Bank's response to the Covid-19 pandemic.
This project was approved in the context of the Bank's response to the COVID-19 pandemic. To avoid delays to the delivery of this project, the Bank's President granted a deviation from the ordinary timelines for PSD disclosure, as contemplated by Section V of the Directive on Access to Information. Details of the Bank's response to COVID-19, and this deviation, can be found on our website.
Due to the pandemic, local MSEs face significant cash flow constraints and require urgent support to withstand the economic downturn. In this situation, Arvand Bank could serve as a right conduit to channel funding to the local MSEs.
ETI score: 80
Resilient: The Project will help to safeguard the bank's soundness and potentially facilitate the attraction of additional funding from other lenders.
Competitive: Affordable external financing during COVID-19 crisis will support Arvand's efforts to keep providing financing to MSEs in Tajikistan. Business lending is one of the key operational priorities of Arvand Bank. The loan book is very granular, populated with solvent and creditworthy borrowers that will benefit from Arvand's enhanced lending capacity.
ARVAND BANK CJSC
Arvand has transformed from a Microfinance Institution (MFI) into a bank in September 2019 and currently operates as a fully-fledged universal commercial bank, offering a full range of banking services, primarily to retail segment. Arvand Bank is the seventh-largest bank by assets and fifth in terms of loan book and is a longstanding EBRD partner-bank. The bank currently serves over 43,000 borrowers and 45,000 deposit customers through 8 branches and 60 banking service centers across Tajikistan.
EBRD Finance Summary
A senior unsecured loan of US$ 1.5 million under the Resilience Framework in two equal tranches.
Total Project Cost
The project is part of the Covid-19 crisis response. The EBRD financing effectively bridges a liquidity gap due to the adverse market conditions caused by the Covid-19 pandemic and and will allow Arvand to continue lending to eligible micro and small businesses in Tajikistan.
Environmental and Social Summary
Category FI (2019 ESP). Bank Arvand is an existing client of the Bank and its environmental and social (E&S) performance has been satisfactory to date as evidenced by annual reporting on environmental and social matters. In the context of this new transaction, Arvand will be required to continue to comply with Performance Requirements 2, 4 and 9, and to apply the EBRD's E&S Risk Management Procedures for Corporate and SME loans as well as the EBRD's E&S Risk Management Procedures for Trade Finance. Arvand is offering banking services largely to retail segment with an average loan size of US$ 1,000; this is considered as low E&S risk. The Company will continue to submit annual environmental and social reports to the Bank. There is no GET component expected for this Project.
Technical Cooperation and Grant Financing
Company Contact Information
+992 44 600 14 00
+992 3422 4 32 40
CJSC Bank Arvand 1A Somoni Avenue Khujand, 735700, Republic of Tajikistan
PSD last updated
06 Oct 2020
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