IFC Boosts Financing for Farmers, Small Businesses in Uzbekistan
Kattakul Kattakulov owns a small poultry farm in Termez, a small city in south Uzbekistan, and has toiled for years to build up his business. Needing to expand in order to provide for his wife and six children, he took out a $60,000 loan from IFC client Hamkorbank.
With those funds he bought 20,000 more broiler chickens, 10,000 tons of feed and modern cold storage units for meat. Today Kattakul’s farm is producing 20,000 broilers a month, up an impressive four-fold from just one year ago.
“The loan has helped me make a much better life for my family, and given my children a chance for a better future,” says Kattakul.
Agriculture plays an important role in Uzbekistan’s economy, where half of the population lives in rural areas and depends on farming or food production for their livelihoods. Despite the significant financing needs of farmers and agri-businesses, the financial sector lacks the necessary skills and tools to serve this sizable market.
IFC's Central Asia Agri-Financing Project is working with local financial institutions to help them understand the risks and develop lending tools unique to the agricultural sector. IFC has helped Hamkorbank strengthen its agricultural lending operations, supporting the disbursal of 30 agri-lending transactions worth $2.4 million in just six months.
“Thanks to IFC, we have increased our agricultural loan portfolio and built capacity for agricultural operations, thus increasing access to finance for farmers and helping them become more productive and profitable,” says Olmahon Turajonova, Hamkorbank CEO.
Originally a small regional bank, Hamkorbank has, with World Bank Group’s support, become one of the leading private banks in Uzbekistan, where state-owned banks play a significant role.
The bank is World Bank Group’s strategic partner to support private sector development in the country. Since 2001, IFC has become a Hamkorbank shareholder and provided $17 million worth of investments to the bank to help increase lending to smaller businesses. Since 2005, Hamkorbank's SME loan portfolio has increased nearly 40-fold. IFC has also assisted the bank to build its institutional capacity, develop prudent risk management practices and a strong corporate governance framework.
As a part of the Rural Enterprise Support Project, the World Bank provided Hamkorbank with almost $10 million loan to help increase financial sustainability of agri-businesses in remote areas of the country.