FIF - Youth in Business Loan I - Bank Arvand

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

The provision of a senior unsecured loan of up to US$ 5 million (in TJS equivalent) under the FIF Youth in Business Programme for Central Asia (YiB CA) in favour of Bank Arvand.

Project ID 55115

Status Disbursing

Location

Tajikistan

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Gulnora Yakubova
gulnora.yakubova@arvand.tj
+992 44 600 14 00
www.arvand.tj
CJSC Bank Arvand 1A Somoni Avenue Khujand, 735700, Republic of Tajikistan

Project ID 55115

Status Disbursing

Location

Tajikistan

Business Sector

Financial Institutions

Notice Type

Private

Environmental Category

Approval Date

19 Mar 2024

Disclosure date

22 Mar 2024

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project description

The provision of a senior unsecured loan of up to US$ 5 million (in TJS equivalent) under the FIF Youth in Business Programme for Central Asia (YiB CA) in favour of Bank Arvand.

Project objectives

The project aims at supporting LCY lending to eligible youth-owned or youth-led MSMEs in Tajikistan in accordance with the YiB CA Policy Statement.

Transition impact

ETI Score:71

ject will contribute to the YiB CA objectives and support its Inclusive (Primary) and Competitive (Secondary) qualities. The project is expected to increase lending to Youth MSMEs, facilitate Arvand's capacity building and promote the transfer of skills to young business owners/managers in the country.

Client information

ARVAND BANK CJSC

Closed Joint Stock Company "Arvand Bank" (Arvand) operates as a fully-fledged universal commercial bank, offering a full range of banking services, primarily to retail and MSME segments in Tajikistan. Arvand is the ninth-largest bank by assets (with market share of 3%) and the fourth by the loan book (6%) among Tajikistan banks as of end-2023.

EBRD Finance Summary

USD 5,000,000.00

Total project cost

USD 5,000,000.00

Additionality

Financing structure. EBRD offers a tenor, which is above the market average and is necessary to structure the project. EBRD offers local currency financing on terms not readily available in the market.

Innovative financing structures and/or instruments. The project will benefit from a First Loss Risk Cover (FLRC) and a Results-Based Compensation (RBC), which is a tailor-made and innovative instrument in the Central Asian market. FLRC and RBC are intended to support Arvand to offer lower or more flexible collateral requirements.

Standard setting: Through a combination of elements (financing; FLRC; RBC; TC), the Youth in Business Programme helps the Borrower raise its inclusive financing standards by generating a better awareness and understanding of the needs of the underserved segment of young entrepreneurs. The comprehensive TC package supports PFIs in adapting their products and delivery mechanisms to better suit the needs of young entrepreneurs, thus allowing Arvand to use the potential of the segment and accelerating its financial inclusion.

Knowledge, innovation and capacity building: The Programme includes extensive capacity building, comprising training, advisory support for PFIs and for Youth MSMEs through activities of the Advice for Small Business (ASB) team, allowing all parties to access and benefit from knowledge and expertise that may not be present in the local market. A strong focus is on digital delivery to maximise outreach and improve accessibility to services in the regions outside of capital cities, making the products attractive to young entrepreneurs and micro-companies.

Gender SMART: To address the persistent gender gaps in youth entrepreneurship in Tajikistan, Arvand will receive TC support to develop a gender-responsive approach to youth focused lending, thereby ensuring that youth outreach is designed for both young women and men.

Environmental & Social Summary

Category FI (2019 ESP). The client is well known to the Bank through various previous transactions and has been performing well on these projects. On the proposed Project, the client will be required to continue to apply PR2 and PR4 to their internal operations, and apply PR9 and the appropriate E&S Procedures to the investment activities.

Technical Cooperation and Grant Financing

A. Technical Cooperation (TC) provided at the program level to all participating partner financial institutions (PFIs) in Central Asia. The YiB CA TC Programme includes two linked TC components:

(i) Tailored capacity-building for PFIs. Funding source: EBRD Shareholder Special Fund (SSF). € 4 mln at the YiB CA level, € 1.2 mln for the pilot phase. Funding status: Confirmed for the pilot phase.

(ii) Capacity-building for Youth MSMEs via the ASB team. Funding source: SSF. Amount/currency: € 6 mln at the YiB CA level, € 1.5 mln for the pilot phase. Funding status: Confirmed for the pilot phase.

B. Co-investment grants / Concessional Finance (Non-TC)

The project involves:

(i) First Loss Risk Cover mechanism of up to 7% of the YiB loan (limited to 70% per a single sub-loan); the FLRC will compensate for credit losses of Arvand as a result of its participation in the YiB CA.

(ii) Results-based Compensation (RBC) of up to 3% of the proposed YiB Loan; the RBC is expected to partially compensate Arvand for the up-front investments related to building the necessary infrastructure for a sustainable YiB lending expansion.

Funding source: SSF. Amount/currency: USD 500,000 in total (or 10% of the proposed YiB loan). Funding status: Confirmed

Company Contact Information

Gulnora Yakubova
gulnora.yakubova@arvand.tj
+992 44 600 14 00
www.arvand.tj
CJSC Bank Arvand 1A Somoni Avenue Khujand, 735700, Republic of Tajikistan

PSD last updated

22 Mar 2024

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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FIF - Youth in Business Loan I - Bank Arvand

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)