Provision of a senior loan of up to US$ 2.0 million (€1.6 million equivalent) to Arvand Bank under the Financial Intermediary Framework-Central Asian Women in Business (FIF - CA WiB) programme for on-lending to women-led micro, small and medium-sized enterprises (MSMEs).
The project objective is to promote and support women entrepreneurship in Tajikistan and, more broadly, women's participation in business by assisting women-led MSMEs to access finance, know-how and advice, particularly in the regions of the country. The financing gap is a major obstacle in enabling the transition of women-led MSMEs.
The project implemented by Arvand Bank, an experienced lender to women-led businesses, will contribute to narrowing the gap. The proceeds will be used to finance loans to eligible women-led MSMEs in accordance with the elibibility criteria set in the Policy Statement for the Central Asian Women in Business programme.
ETI score: 70
The project contributes to the objectives of the Central Asia Women in Business Programme ("CA WiB"), supporting the Inclusive and Competitive Transtion Impact qualities. The loan will support the transition objective of the CA WiB programme, i.e. the promotion of female entrepreneurship and, more broadly, women's active participation in business, alleviating gender inclusion gaps in terms of "access to finance" and "employment and business". The proposed CA WiB loan represents the second WiB loan to the client following a successful realisation of a pilot TajWiB loan.
ARVAND BANK CJSC
Arvand was transformed from an MFI into 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.
As of end 2020 Arvand Bank was the seventh-largest bank by assets and fifth in terms of loan book in Tajikistan. Arvand bank is a longstanding EBRD partner bank serving around 39,000 borrowers and 49,000 deposit customers through 8 branches and 63 customer service outlets across Tajikistan as of end 2020. The relationship between EBRD and Arvand began in 2006, and since then comprised 11 projects in the total amount of USD 13.5m. The bank successfully took part in number of EBRD`s programmes (TAFF, MSE, ClimAdapt, WiB and RF) and currently developing its business under EBRD TFP programme.
EBRD Finance Summary
A senior loan of up to US$ 2.0 million (€ 1.6 million equivalent) in two tranches of USD 1.0 million each under the Central Asian Women in Business Programme.
Total Project Cost
The project is highly additional as it broadens access to finance for women-led MSMEs through offering tailored products and facilitating economic inclusion of female entrepreneurs. The Bank will leverage the expertise of the EBRD and the TC consultant to continue improving its offer and delivery mechanisms for its women borrowers, who are facing increasing challenges due to the crisis. Local expertise in the segment is limited, therefore training and advising from the TC consultant will prove beneficial for the partner financial institution. In addition, Arvand will benefit from involvement in all activities organised under the umbrella of the programme and will share its multi-year expertise in inclusion, combining it with dedicated financing and business advisory services.
Environmental and Social Summary
Bank Arvand will be required to continue to comply with Performance Requirements 2, 4 and 9, and to apply EBRD's E&S Risk Management Procedures for Corporate and SME loans. Arvand should continue to provide annual E&S reporting to the Bank on compliance with the applicable PRs and any other E&S matters arising during the year.
Technical Cooperation and Grant Financing
TC: The Central Asian Women in Business Programme includes two TC components: i) tailored capacity-building for partner banks (US$ 5.0 million financed by We-Fi), and ii) capacity-building for women-led MSMEs via the Advice for Small Businesses team (US$ 4.5 million financed by We-Fi).
Non-TC: The project involves a First Loss Risk Cover mechanism of up to 10% of the loan (limited to 70% per a single sub-loan) which translates into up to US$ 0.2 million; the mechanism will compensate for credit losses of Bank Arvand, if any and within US$ 0.2 million, in relation to its participation in the Programme. Sourse: SBIF.
Company Contact Information
+992 44 600 14 00
CJSC Bank Arvand 1A Somoni Avenue Khujand, 735700, Republic of Tajikistan
PSD last updated
05 Mar 2021
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