The International Finance Corporation (IFC), the private sector arm of the World Bank, has signed an agreement to purchase up to a 17.5% stake in Azerigazbank and to extend a US$1mn trade finance line.

Azerigazbank is one of the largest private banks in Azerbaijan and provides services to micro, small and medium enterprises.

Shahbaz Mavaddat, IFC’s director for Southern Europe and Central Asia, notes: “One of our main objectives in Azerbaijan is to help strengthen private financial institutions like Azerigazbank. The IFC investment and trade finance line will assist in the development of the emerging MSME sector in Azerbaijan by increasing the availability of quality banking services and credit to micro, small and medium enterprises.”

The IFC investment will provide much needed equity capital to Azerigazbank, supporting its rapid growth due to a steady rise in demand for quality banking services and term credit.  The investment will strengthen the bank’s balance sheet, and the trade finance line will facilitate the company’s trade finance activities in one of the fastest-growing economies.

Jyrki Koskelo, IFC’s director for global financial markets, adds: “IFC has had a strong institution-building role in the development of Azerbaijan’s financial markets. IFC’s equity investment in Azerigazbank, combined with technical assistance will help deepen, strengthen, and diversify the local financial sector.”