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| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. |
Summary of Project Information (SPI) |
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| Project number | 11545 |
| Project name | Asaka Bank II |
| Country | Uzbekistan |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Asaka Bank |
| Environmental category | FI |
| Date SPI disclosed | June 21, 2002 |
| Projected board date | July 31, 2002 |
| Status | Active |
| Previous Events | Invested: January 14, 2004
Signed: November 29, 2002
Approved: September 25, 2002 |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Asaka Bank (Asaka) -- the second largest bank in Uzbekistan, founded in 1995 and headquartered in the capital city of Tashkent. While Asaka was established as a separate legal entity and is operated on a commercial basis, 98% of its shares are owned by the Ministry of Finance of Uzbekistan. |
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| Total project cost and proposed IFC investment |
| The proposed project consists of a second credit line to Asaka for a US$5 million A loan for IFC's own account. The first credit line to Asaka was approved in 1999, for a US$10 million A loan for IFC's own account. |
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| Location of project and description of site |
| Asaka's headquarters is in the capital city of Tashkent with 490 employees, while an additional 1,477 staff cover the rest of the country through the 24-branch network (1,967 total number of employees). Investments can be made throughout the country. |
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| Description of company and purpose of project |
The project's principal purpose is to address the scarcity of term finance available in Uzbekistan, especially to the small and medium enterprises (SMEs) and Asaka has proven to be an efficient conduit bank with a strong pipeline of potential projects.
The project's developmental impact will be considerable in terms of its economic impact, stimulus for business growth, employment generation, and confidence building in the banking sector:
The main developmental benefits will be at the enterprise level: they will come through business growth and the transfer of expertise and technology which will increase productivity. In addition, SME development will foster entrepreneurship, develop much needed managerial/financial skills, and increase employment and contribute to higher standards of living.
The financial intermediation through the banking sector to SMEs will result in private sector development as well as institutional building for the financial sector. This will alleviate the severe shortage of long-term foreign currency financing to private SMEs by availing these credit facilities to financial intermediaries. By bringing additional resources into the banking system, the project will boost domestic investment and stimulate economic growth.
One of the major constraints for SME development in Uzbekistan is their limited access to financing. IFC’s role is to make available long-term hard currency financing to SMEs during this transitional phase of the Uzbek economy. IFC's strategy for Uzbekistan focuses on helping reduce poverty through accelerated growth and one of the key tools of this strategy is to provide "support to sectors such as SMEs which are particularly disadvantaged in the present economic environment in Uzbekistan." Through this second credit line to Asaka Bank, IFC will continue to play a strong role in making available this much-needed form of financial intermediation to SMEs in Uzbekistan. |
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| Environmental and social issues - Category FI |
This is a Financial Intermediary (FI) Type 2 project according to IFC's environmental review procedure. The Bank will be required to undertake an environmental review of each subproject to ensure compliance with host country requirements, IFC environmental and social safeguard policies, and , if applicable, World Bank Group environmental, health and safety guidelines. The Bank’s environmental coordinator has attended IFC ‘s Competitive Environmental Advantage workshop, and has served a one-month internship in IFC’s Environment and Social Development Department during October, 2001. The Bank must obtain IFC clearance prior to making any investment with IFC funds in any Category A project. In addition, the Bank must submit an annual report on environmental management system and subproject environmental performance.
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| To contact the project company, please write to: |
Mr. R. Alimoukhamedov, Head of International Division
Asaka Bank
67 Nukus Street, Tashkent, Uzbekistan, 70015 Uzbekistan |
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