Dushanbe, Tajikistan, July 20, 2022—IFC is providing a crucial local currency financing to Imon International, the country's leading microfinance organization, to help boost its lending to micro and small enterprises (MSEs) in Tajikistan hit by the COVID-19 pandemic.
IFC's three-year $5 million equivalent loan in Tajik somoni will enable Imon International to finance hundreds of MSEs that have struggled to access the local currency financing and support they need to grow post-COVID-19. The financing gap for micro, small, and medium enterprises in Tajikistan stands at about $1.45 billion, 18 percent of the aggregate GDP, according to the SME Finance Forum. With smaller businesses employing a third of the total workforce, that represents a major constraint to private sector growth.
Imon International has a broad network around the country with more than 110,000 active borrowers. MSEs in rural and remote areas account for more than two-thirds of its client base.
"Micro businesses represent a key source of income for a significant number of people in Tajikistan, especially in rural areas. IFC's support will enable us to support more micro and small businesses across the country, fostering economic growth and job creation in a challenging economic environment and bolstering the resilience of the sector," said Andrey Palka, Chairman of the Management Board of Imon International.
"IFC's investment reinforces our commitment to boost access to finance in Tajikistan and spur private sector growth to create jobs and reduce poverty," said Farukh Sultonov, IFC Country Officer for Tajikistan. "IMON International's focus on microfinance and its strong track record in reaching out to the poor and underprivileged help drive sustainable economic development and are in line with IFC's country strategy for Tajikistan."
The project will benefit from the International Development Association's Private Sector Window, which helps de-risk investments in low-income countries. The partnership with Imon International is part of IFC's Base of the Pyramid Program. Launched in 2020, it helps financial services providers deliver funding to small businesses, informal enterprises, and low-income households that have been hit by the economic slowdown caused by the COVID-19 pandemic.
Since 2008, IFC has provided local currency funds to IMON International totaling $17.5 million to boost lending to micro entrepreneurs.
IMON International's largest shareholders are the Alternative Fund (managed and represented by Mikro Kapital S.a.r.l.), European Bank for Reconstruction and Development, Netherlands Development Finance Company (FMO), Mennonite Economic Development Associates (MEDA) and Pettelaar Effectenbewaarbedrijf N.V. - Triple Jump. All these well-known international shareholders support the activities of IMON International in the field of lending to micro and small businesses. For more information about Imon International, please visit: https://www.imon.tj
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 the IDA Private Sector Window
As part of the 19th replenishment of the International Development Association (IDA), the World Bank Group is continuing the IDA Private Sector Window (PSW) created under IDA18 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA's objectives and the World Bank Group's twin goals, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by IFC and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution and the World Bank Group's other tools and approaches are insufficient. For more information, visit: http://ida.worldbank.org/psw
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