Tajikistan has become the 18th country in which the European Bank for Reconstruction and Development (EBRD) is launching its programme to finance the development of small and micro businesses.

The EBRD is providing a US$7mn credit line for on-lending to small and micro clients through the local banking system in the poorest of its 27 countries of operation. Two Tajik banks, Eskhata Bank and Tajiksodirotbank., have already signed up as participants.

This programme should bring new opportunities to all those entrepreneurs in Tajikistan who run their own businesses and who want to expand or improve their activities, but have until now found it hard to obtain loans from local banks, said Fernand Pillonel, the EBRD’s resident representative in Dushanbe.

We are not looking for businesses from any particular sector, Mr. Pillonel said, adding: Anyone without access to finance, and in need of between US$50 and US$100,000, is a potential client, even if they have been turned down by other banks because of lack of credit history or sufficient collateral.

The British, Swiss and U.S. governments are providing donor funds to help local commercial banks implement the EBRD programme. The European Union has also committed additional funds to support the programme.

The Tajikistan Micro and Small Enterprise Finance Facility (TMSEF) aims to replicate the success of previous EBRD initiatives in this field.

The EBRD’s first small business lending programme was launched in Russia in 1994 and has since spread to 18 countries, including four Central Asian countries, Kazakhstan, Uzbekistan, the Kyrgyz Republic and Tajikistan. More than 400,000 loans amounting to almost US$2.9 billion have been disbursed across all EBRD small business programmes. In the Central Asian states alone 76,000 business loans totaling over US$400 million have been made since 1998.

Under the EBRD’s Tajik programme, micro loans of up to US$10,000 will be available while the ceiling on small loans will be US$100,000. The term will typically be up to three years. Interest rates will depend on market conditions.

Additional partner banks are expected to join the programme by the end of next year.