DUSHANBE (TCA) — The European Bank for Reconstruction and Development (EBRD) is providing a local currency loan of up to US $2 million equivalent to the Tajik microfinance institution Arvand for on-lending for local micro and small enterprises (MSMEs). This loan is a part of a larger financing package approved for Arvand which also includes an agricultural component, the EBRD said.
Strengthening local enterprises is a key task for the EBRD as it aims to support the countries where it invests to re-energise growth. Access to finance remains a key impediment for the development of a strong and flourishing private sector, and a particular issue for MSMEs who often find access to finance difficult. Loans are also often not available in local currency. This new EBRD loan is helping to address these key issues.
Arvand is the second largest microfinance institution in Tajikistan with a large distribution network. The company has been at the forefront of innovation and development in the country and is a long-standing partner of the EBRD. Arvand’s strong network also reaches businesses in remote parts of the country.
Richard Jones, Head of the EBRD’s Dushanbe Resident Office, said: “We are very pleased to provide fresh finance to Tajik businesses via Arvand, a strong and trusted partner. With our loans we are making a contribution to alleviate the high dollarisation of the Tajik economy and the scarce access to local currency funding. We hope that the EBRD loan to Arvand will encourage other international lenders to provide longer-term funding in local currency to viable financial institutions in Tajikistan to support further growth of the Tajik private sector.”
Shoira Sadykova, General Director of Arvand, added: “A loan from the EBRD in a difficult time for the sector and the country in general confirms its commitment for development of micro and small businesses in Tajikistan. Arvand aims to stand by its clients through the crises and help them overcome this challenging period; hence, support from our partners is very important. Businesses in Tajikistan need local currency funding to continue their activities and we are ready to provide it.”