The European Bank for Reconstruction and Development (EBRD) is supporting small businesses in Tajikistan with an investment to help set up a new microfinance institution in the country.
In response to the high demand for funding from small businesses in Tajikistan, the EBRD is making a US$2mn equity investment in the new AccessBank, majority-owned by Access Holding Microfinance, a Berlin-based group of financial institutions active in microfinance throughout the world.
Other investors in the project are the International Finance Corporation (IFC) and Germany’s Kreditanstalt fuer Wiederaufbau (KfW). Together with the EBRD’s investment, the total contribution of these institutions is US$11mn.
With the support of the EBRD and other co-founding international financial institutions, AccessBank will promote the development of the private sector in Tajikistan with much needed lending to micro and small enterprises (MSEs).
As a result of the financial crisis and liquidity constraints, Tajik banks have stopped providing new loans to customers, which has particularly affected the very smallest enterprises. There are over 500,000 small businesses currently operating in Tajikistan.
Upon its launch in late 2009, AccessBank will offer Tajik businesses micro-loans and agribusiness loans. The bank will later diversify its portfolio with new products, including micro-leasing, micro insurance products and credit cards.
To facilitate the access to finance for entrepreneurs in rural areas, AccessBank will develop a strong regional presence in Tajikistan. It plans to open 17 branches outside of the Tajik capital, Dushanbe. Grant funds from governments of Austria, Japan and Luxemburg will be used to provide technical assistance to AccessBank for regional expansion. The IFC and KfW will provide an equal share of technical assistance for the establishment of the bank.
The EBRD will hold an 18% stake in the new micro lending bank, Access Holding Microfinance will hold 51%, and the remaining shares will be split between the IFC and KfW, with 18% and 13% respectively.
“In the current economic environment, the proposed project will provide much-needed funding to MSEs, particularly outside of Dushanbe, and will improve confidence in the banking sector whilst contributing to the overall expansion and strengthening of the financial sector in Tajikistan”, says Chikako Kuno, director for the small business finance team of EBRD.
The EBRD is the largest single provider of finance for MSEs in Tajikistan through various frameworks. To date, the bank has committed €54mn to the financial sector in Tajikistan. Overall, since the beginning of its operations in the country, the bank has invested over €100mn in the Tajik economy.
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