Expanding Microfinance in Central Asia

Access to finance in Central Asia can be challenging. The region's geographic diversity makes it costly to do business or deliver basic services, particularly to people in remote areas. In 2005, less than 1 percent of people in the region had access to microcredit, compared to 2.7 percent in South Asia.

To help, IFC is partnering with local microfinance institutions to support micro, small, and medium enterprises, which form the backbone of local economies and are crucial to the region's development and economic growth.

As part of its efforts, IFC has established the Central Asia Micro and Small Enterprises Facility, which is providing up to $45 million to banks for on-lending to entrepreneurs and smaller businesses in the region.

Since 2002, IFC has: Invested in seven banks in Kazakhstan, the Kyrgyz Republic, and Tajikistan through the regional facility Provided in-depth training to the Kyrgyz Central Bank to facilitate microfinance legislation Advised governments on developing legal frameworks for microfinance Helped Tajikistan and Uzbekistan adopt laws on microfinance

IFC has invested more than $1.3 billion in financial institutions for on-lending to micro, small, and medium enterprises in Southern Europe and Central Asia. This has helped increase the number of loans to MSMEs by 36 percent and the volume of lending by 53 percent. Our investment and advisory activities in Azerbaijan, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan are having a strong development impact.

Azerbaijan

IFC is helping several banks in Azerbaijan develop their SME operations. Our clients include Azerigazbank, Credagro, Rabitabank, Respublika, and Unibank. We have also advised some of these banks on improving corporate governance and establishing more efficient systems and profitable businesses.

We helped establish the Microfinance Bank of Azerbaijan and supported its growth and expansion with a $1 million advisory program. Our investments in two microfinance institutions has helped disburse more than 36,000 loans for more than $57 million to smaller enterprises, which make up more than 75 percent of all registered businesses in country. To date, IFC has invested $58 million in equity and loans in the country's financial sector. Learn more...

Kyrgyz Republic

IFC is partnering with several microfinance institutions in the Kyrgyz Republic, helping expand their reach to underserved markets. We recently approved a $5 million loan to support the Kyrgyz Investment and Credit Bank's outreach to remote regions. The bank aims to increase its lending portfolio from 760 loans to about 3,000 by the end of 2013. This will open up new opportunities for local entrepreneurs, helping increase incomes and reduce poverty. In 2001, IFC invested in the bank as a founding shareholder, providing $4.2 million in loan and equity.

We were also instrumental in launching the microfinance operations of FINCA and Demirbank, with $1 million and $500,000 equity investments respectively. In addition, we are supporting Bai-Tushum's transition from a microfinance organization into a commercial bank that focuses on microlending. A $1.2 million investment enabled the bank to increase its number of loans more than three-fold by the end of 2007. Learn more...

Tajikistan

In Tajikistan, IFC is working with local banks to build their microlending capacities. Our clients include Eskhata Bank; the First Microfinance Bank of Tajikistan; the International Micro Loan Fund IMON; and Tojiksodirotbonk, the country's third-largest bank.

We also partnered with the Swiss government to launch an innovative finance and marketing cooperative for small cotton farmers. This effort has mobilized nearly $5 million in financing in the agricultural sector. Learn more...

Uzbekistan

IFC provided loan and equity financing to help establish Uzbekleasing, one of Uzbekistan's first leasing companies that focuses on micro and small entrepreneurs. IFC is supporting the company's growth through financing and advisory services. We recently approved a new $3 million loan for this effort. We are also helping another client, Hamkorbank, develop its MSME operations, with a $4 million investment and extensive advisory support. Learn more...

For more information contact:

Ilya Sverdlov
IFC Communications Officer
Phone: + 7 (495) 411 7555 ext. 2072
E-mail: isverdlov@ifc.org