Asian Development Bank (ADB) and JSC Alliance Bank (ALB) of Kazakhstan have signed a US$50mn five-year senior loan. This represents ADB’s first private sector financing and first financing without a central government guarantee in Kazakhstan.

The diversification of the Kazakh economy toward non-oil investments, particularly through the small and medium enterprise (SME) sector, is a crucial factor for Kazakhstan’s sustainable and inclusive economic development, especially after the oil boom recedes.

“To achieve sustainable and inclusive economic development, creating conditions for growth of the SME sector is of key importance,” says Stephen Wermert, country director of ADB’s resident mission in Kazakhstan.

“The loan will help ALB grow its SME loan portfolio by providing part of the needed debt funding. It will also demonstrate viability and boost investors’ and creditors” confidence in the country’s banking sector. As a result, this would also increase depositor confidence in the local economy and in the banking sector.”

The loan will help to bridge an unwarranted maturity gap, allowing the bank to match its assets and liabilities more closely.

ALB is strategically committed to the SME and retail segment, and believes that the demand for SME and retail banking services will continue to grow.

In the coming years, ALB intends to substantially increase its SME loan portfolio and establish a leading position in the market, as the bank believes this sector represents one of the most important areas of growth in the Kazakh economy and banking system.