A Kyrgyz bank active in financing small and medium-sized businesses is to quadruple its micro-lending credit line thanks to a US$3mn loan that the European Bank for Reconstruction and Development (EBRD) is putting together with the International Finance Corporation (IFC), the private-sector arm of the World Bank.

Investment Export-Import Bank (Ineximbank) started lending to micro and small enterprises in 2002, when it became a partner bank of the EBRD’s Kyrgyz micro-lending programme, and also that year secured a US$1mn loan provided jointly by the EBRD itself and the US-sponsored EBRD SME (small and medium-sized enterprise) Finance Facility.

Half of the additional US$3mn loan will come from the IFC, US$1.2mn from the EBRD and US$300,000 from the EBRD SME Finance Facility, which uses US$150mn in EBRD and US government funds to support the growth of small business in some EBRD countries of operations in the south-eastern Europe, the Caucasus and Central Asia.

Ineximbank, in which the EBRD acquired a 25% stake last October, is one of the five partner banks through which the EBRD and IFC provide loans to small businesses in eight cities of the Kyrgyz Republic, as well as in rural areas where credit sources are rarer.

The US, European Union, Dutch and Swiss governments financially underpin the bank’s Kyrgyz micro-lending programme. Some 3,200 loans with a cumulative value of US$5.9mn have been disbursed since its launch in April 2002. The 2004 target is to double the amount of loans being made to 1,000 a month.

In turn, the Kyrgyz initiative is part of a wider Central Asian EBRD programme under which more than 94,000 loans worth about US$490mn have so far been made to micro, small and medium-sized firms to kick-start economic activity at ground level in Kazakhstan, Uzbekistan, Tajikistan and the Kyrgyz Republic.