TASHKENT (TCA) — The European Bank for Reconstruction and Development (EBRD) provided US $30 million to the fourth largest financial institution in Uzbekistan, Joint-Stock Commercial Mortgage Bank Ipoteka-Bank. The financing package consisting of a $25 million credit line to support micro, small and medium-sized businesses (MSMEs) and a trade finance limit of up to $5 million under the EBRD’s Trade Facilitation Programme (TFP) was signed in Tashkent on December 22, the EBRD said.
MSMEs are playing an increasingly important role in Uzbekistan’s economy. In 2016, SMEs generated nearly 60% of the country’s GDP and provided more than 75% of total jobs. At the same time, considering the overall low level of bank loans to GDP (27%), MSMEs are clearly underserved by the current financial market and require more financing than is currently available.
With the network of 38 branches and over 700 outlets across Uzbekistan, Ipoteka-Bank will be well placed to provide much-needed financial resources to smaller businesses all over the country with the support from EBRD. In addition to the financing, EBRD will provide a technical assistance to Ipoteka-Bank in form of advisory services to foster the development of tailored lending activities to MSMEs.
Meanwhile, the trade finance facility will help Ipoteka-Bank to facilitate cross border trade, contributing to fostering regional connectivity and integration, to further develop its correspondent banking services and strengthen its trade finance product range.
Nick Tesseyman, the Managing Director for Financial Institutions at EBRD, said: “We are very glad to partner with Ipoteka-Bank to support lending to MSMEs and Trade Facilitation Programme. We consider MSMEs as the backbone of the economy and a priority sector to develop as it contributes significantly to economic growth. We are confident that productive cooperation between our institutions may become a springboard for further strong, positive development and actions that will deliver long lasting benefits to Uzbek financial sector.”
To date, the EBRD invested €864 million in Uzbekistan in 57 projects. Entering a new stage of engagement in the country, the Bank has already identified a number of possible new projects, some of which are due to be signed by the end of 2017, with more to follow in 2018.