The European Bank for Reconstruction and Development (EBRD) is lending Azerbaijan’s only bank dedicated to micro finance US$5mn to help boost entrepreneurship across the country.

The loan to the Micro Finance Bank of Azerbaijan (MFBA) will also help the bank expand beyond Baku to towns and regions of the country where access to finance is often sparse. Loans of up to US$50,000 will be available to clients.

George Krivicky, director for the Caucasus at the EBRD, says that in just over 12 months the micro finance bank has disbursed around 2,000 micro loans worth nearly US$4mn. Krivicky adds that these figures clearly demonstrate the importance of such an institution in Azerbaijan, and this loan will help meet the growing demands of the bank’s increasing number of clients. It will also help promote the development of the private, non-oil sector and grass-roots entrepreneurship in Azerbaijan.

MFBA, launched in October 2002, offers commercial loans as well as other banking services, such as current accounts, international payment transactions and foreign currency services. Earlier this year the bank opened a new branch in Baku’s Khalqlar Dostuglu metro station, and just last month another branch in the Sumgait region.

The EBRD has a €1.25mn equity stake in MFBA, and additional finance has been provided by the International Finance Corporation, Black Sea Trade and Development Bank and LfS Financial Systems GmbH. The EU provided technical assistance funding to help meet start-up expenses and support the bank’s regional expansion.