The provision of a senior loan of up to US$ 1.0 million 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 proposed loan is the third WiB loan to the client following the successful realisation of a first pilot under the Taj WiB programme and a second transaction under the CA WiB. The transaction represents a continuation of the previous engagements, aiming to support further women-led MSMEs in Tajikistan by providing financing opportunities for their business activities and access to know-how.
ETI score: 75
The project is a sub-operation of the CA WiB programme. It contributes to the objectives of the Central Asia Women in Business Programme ("CA WiB"), supporting the Inclusive and Competitive transition impact qualities, with the ultimate goal of promoting female entrepreneurship and, more broadly, women's active participation in business, thus alleviating gender inclusion gaps in terms of "access to finance" and "employment and business". The proposed CA WiB Loan represents a continuation of the two previous engagements with the client under the TajWiB and CA WiB programmes, respectively.
ARVAND BANK CJSC
Closed Joint Stock Company "Arvand Bank" (Arvand) operates as a universal commercial bank, offering a full range of banking services, primarily to retail and MSME segments in Tajikistan.
As of end-February 2022 the bank operated a network of 73 branches and banking service centers and had over 48,000 borrowers with a net loan portfolio exceeding US$ 57m. It has maore than 64,000 individual depositors.
EBRD Finance Summary
A senior loan of up to US$ 1.0 million in two tranches of USD 0.5million each under the Central Asian Women in Business Programme.
Total Project Cost
Financing structure. Additionality of the proposed Loan stems from providing access to medium-term funding not readily available in Tajikistan, especially in the current macro-economic environment. Medium-term local currency funding will promote more adequate loan terms and structures than is currently available to MSMEs. The EBRD remains one of few IFIs offering local currency funding at commercially acceptable rates in Tajikistan.
Knowledge, innovation, and capacity building. With the WiB programme, the Bank offers a holistic form of support to the Client that, alongside the financing, comprises TC support and First Loss Risk Cover. This comprehensive set of interventions will allow the client to continue improving its practices, offering and delivery mechanisms targeted to women-MSME, who are facing increasing challenges due to the crisis, as well as to penetrate further this segment of the market.
Environmental and Social Summary
Categorised 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 (including the 2021 Annual Environmental & Social Report). Bank Arvand has an E&S Policy and an Exclusion List, as well as a HR Policy and Code of Conduct. There is a system in place for dealing with public enquiries and concerns.
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 EBRD's E&S Risk Management Procedures for Corporate, SME and Microlending. 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: No further TC funds will be allocated. Arvand will continue to benefit from TC previously approved and on-going under the CA WiB Programme (OpID 52720), with some activities that are expected to build further the capacity of the client to serve the needs of women-led MSMEs.
Non-TC: The project involves a First Loss Risk Cover mechanism of up to 10 per cent of the loan (limited to 70 per cent per a single sub-loan); the mechanism will compensate for credit losses of Bank Arvand, if any and within US$ 0.1 million, in relation to its participation in the Programme. Sourse: SBIF (Small Business Impact Fund).
Company Contact Information
+992 44 600 14 00
CJSC Bank Arvand 1A Somoni Avenue Khujand, 735700, Republic of Tajikistan
PSD last updated
10 Mar 2022
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