IFC Supports $155 Million Initiative to Boost Micro and Small Businesses in Central Asia
Afshin Molavi
Phone: (202) 458-5674
Fax: (202) 974-4384
E-mail: amolavi@ifc.org
Washington D.C, August 5, 2002—In an
ambitious initiative that will support micro and small enterprises (MSE’s)
in four countries of Central Asia, the International Finance Corporation
– the private sector development arm of the World Bank – will provide
up to US$45 million for lending (in the form of credit lines) to local
banks for onlending to MSE’s in Kazakhstan, the Kyrgyz Republic, Uzbekistan,
and Tajikistan. The European Bank for Reconstruction and Development
will provide $107 million for this same program, with the Swiss Secretariat
for Economic Affairs (SECO) contributing $3 million, providing a substantial
boost to the local banking sector.
This new EBRD-IFC program will help bridge the gap between local banks
and MSE’s, which are currently underserved by existing financial institutions.
Khosrow Zamani, IFC’s Director for Southern Europe and Central Asia, said:
“This new program will enable local banks to offer reliable, affordable
sources of credit and other banking services that are essential to MSE
growth. Small business growth is critical to Central Asia’s economic
development.”
Recent economic reforms and privatizations in Central Asia have led to
significant numbers of public sector lay-offs, adding urgency to the need
to create a strong private sector. Currently, MSEs play a prominent role
in Central Asia’s private sector.
Selected banks that employ the credit facility will benefit from a comprehensive
Technical Assistance program that will strengthen their lending and operational
capacity.
The investment reflects an important aspect of IFC’s global microfinance
strategy: providing support for commercially viable microfinance activities.
IFC believes that well-managed microfinance institutions can—and
should—be commercially viable so that financial services can be provided
to the underserved over the long term, resulting in a substantial and sustainable
increase in the volume and range of financial services for microenterprises.
More than 500 million poor people around the world run profitable microenterprises
and often cite credit as the primary constraint to business growth. In
the poorest countries, these activities constitute the private sector—generating
jobs and resources for services crucial to poverty reduction, especially
for women.
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people’s lives. IFC
finances private sector investments in the developing world, mobilizes
capital in the international financial markets, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $31 billion of its own funds and arranged
$20 billion in syndications for 2,636 companies in 140 developing countries.
IFC’s committed portfolio at the end of FY01 was $14.3 billion.
|
