Tashkent, Uzbekistan, August 22, 2022—IFC is providing a financing package to one of Uzbekistan's leading banks to boost access to finance for the country's thousands of micro, small and medium enterprises (MSMEs) and narrow the financing gap, especially for women entrepreneurs.
IFC's $20 million financing package to Ipoteka-Bank will be disbursed in Uzbek soums. A quarter of the financing will be earmarked for women-owned businesses as part of IFC's Banking on Women Program. In addition, the Women Entrepreneurs Finance Initiative (We-Fi) is providing performance-based incentives of up to $160,000 to help the bank boost access to finance for women-owned businesses.
The new loan builds upon IFC's original $35 million pre-privatization transaction with the bank in 2020 and preceding advisory engagement.
"IFC's long-term financing and ongoing advisory services give us the foundation and support we need to transform into a commercially-run institution with improved profitability and a focus on SMEs, including women-led businesses. With IFC's support, Ipoteka-Bank has already enhanced its SME banking capability, which is reflected in our SME portfolio more than tripling over the past couple of years," said Elyor Inomjonov, Chairman of Ipoteka-Bank's management board.
Smaller businesses comprise close to 90 percent of all businesses in Uzbekistan, providing nearly three-quarters of all jobs and almost 55 percent of the country's GDP in 2021. However, many have unmet financing needs, with the gap estimated at $10.2 billion. Women-owned SMEs—nearly a quarter of all businesses—have a financing gap of around $1 billion (MSME Finance Gap Database).
The financing also reflects IFC's strategic goal of supporting Uzbekistan's privatization program and helping drive private investments into the country's banking sector, where the number of state-owned banks is still high.
"Smaller businesses are the engine of economic growth, but still struggle to access the support they need to grow and create jobs," said Cassandra Colbert, IFC Senior Manager, Central Asia. "Our cooperation with Ipoteka-Bank will not only help address that issue but also help the bank continue its move towards greater private ownership, creating opportunities for investors and setting an example for other local banks."
IFC has been working to transform Ipoteka-Bank since 2017 by enhancing its commercial operations, corporate governance, and risk-management practices, paving the way for this investment.
About JSCMB "Ipoteka-Bank"
JSCMB "Ipoteka-Bank" is a financial institution with extensive experience in the mortgage lending housing finance and trade finance. In addition, JSСMB "Ipoteka-Bank" is a large and universal bank that provides a wide range of banking services through a well-developed network of 39 branches, due to which it has geographical coverage throughout Uzbekistan. For more information visit www.ipotekabank.uz
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About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
About We-Fi
The Women Entrepreneurs Finance Initiative (We-Fi) is a collaborative partnership among the 14 governments that have made financial contributions, six multilateral development banks that serve as implementing partners, and other public and private stakeholders. We-Fi was formally established in October 2017 as a financial intermediary fund hosted by the World Bank. We-Fi invests in programs and projects that help unlock billions of dollars in financing to address the full range of barriers facing women entrepreneurs—increasing access to finance, markets, technology, and mentoring, while strengthening policy, legal, and regulatory frameworks. As one of the We-Fi implementing partners, IFC supports private sector clients with investment and advisory services to expand financial services and market access for women-owned and women-led firms, as well as increasing the capacity of women entrepreneurs to run high-growth businesses. For more information, visit www.we-fi.org.
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