The European Bank for Reconstruction and Development (EBRD) is marking the second anniversary of its fast-expanding Tajikistan Micro and Small Enterprise Finance Facility (TMSEF) by bringing a 24th bank branch into the programme.

The Gissar branch of AgroInvestBank – one of four major Tajik banking chains to participate – joins TMSEF in November 2005. It is especially significant that the programme is expanding in rural areas such as Gissar, giving the agricultural community easier access to finance. Participating banks can offer MSE loans to local entrepreneurs for sums from US$50 to US$30,000. More than four fifths of loans made so far are for less than US$5,000 and more than a third for less than US$1,000.

Launched in November 2003, the US$7mn TMSEF has been in such strong demand with Tajik small business that, by October 2005, 7,200 such loans for nearly US$20mn had been disbursed. The loans enable the smallest entrepreneurs – more than half of them women, often traders buying goods around Central Asia or in China or Dubai for resale at home – to expand operations. In September and October alone, a total of over 1,200 loans, worth almost US$4mn, were disbursed by 207 loan officers trained as part of the programme.

Microlending stimulates job creation, poverty alleviation and grass-root economic development. The bank’s facility is the largest MSE initiative in Tajikistan, and as of September 2005 had created or helped to maintain an estimated 19,000 new jobs. Participants are Tajiksodirot Bank, Eskhata, TajPromBank and AgroInvestBank.

Co-financed by IFC and the Swiss Seco, this is the fourth project of its kind in Central Asia, following KSBP in Kazakhstan, KMSEF in Kyrgyzstan and J-USBP in Uzbekistan.

Technical assistance is financed by Britain’s DFID, USAid, the European Union and the Early Transition Country Fund to support the partner banks in training loan officers, setting up new MSE units, building up MSE loan portfolios, streamlining lending procedures and developing necessary skills and capacity to provide creditworthy MSEs with swift and adequate access to finance.