ADB and Kompanion Bank to Boost Financing of Women-Led and Small Businesses in Kyrgyzstan

As reported in a news release on its website, on December 28th the Asian Development Bank (ADB) and Kompanion Bank Closed Joint Stock Company on December 28th signed off a loan of up to $5 million in local currency financing to boost micro, small, and medium-sized enterprises (MSMEs) in Kyrgyzstan, especially those owned or led by women. Established in 2004, Kompanion Bank is one of the large commercial banks in the Kyrgyz Republic and dominates the MSME market through its wide network with 93 branches across the country. More than half of Kompanion’s portfolio is with micro and small enterprises. “Women account for about a third of entrepreneurs in the Kyrgyz Republic, but they nevertheless face significant challenges in accessing financial services and credit,” said ADB Director General for Private Sector Operations, Suzanne Gaboury. “This partnership with Kompanion Bank will help bridge the financing gap for women-led small businesses, as well as provide a strong case for the sustainability of local currency lending to these companies.” To strengthen development impact and address finance and bankability constraints, transactions incorporate a credit guarantee from the Asian Development Fund’s (ADF) Private Sector Window facility (PSW) of up to $2.3 million. ADB will also provide technical assistance to Kompanion Bank to enhance its digital capabilities and operational efficiency. “We are happy to be a partner with ADB in this initiative to support micro and small entrepreneurs in the Kyrgyz Republic. We believe that our experience in the MSME market will allow us to make a significant impact on the local economy, and we look forward to working closely with ADB for the benefit of our clients and the community,” said Kompanion Bank CEO, Margarita Cherikbaeva. ADB will also help Kompanion Bank to develop a gender action plan to promote gender equality and women’s empowerment in its business activities. Key activities will include increasing the number of women borrowers and delivering training on improved agricultural practices and digital and financial literacy for female clients.

ADB Helps Support Privatization, Expand Lending to MSMEs in Uzbekistan

According to a press release by the Asian Development Bank (ADB), the bank, in partnership with Sanoat Qurilish Bank (SQB) have signed a $50 million senior convertible loan to support Uzbekistan’s privatization of state-owned banks, which will strengthen the banking sector, and contribute to economic growth and job creation. The International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) are parallel lenders. The loan will be used to help SQB expand its financing to underserved micro, small, and medium-sized enterprises (MSMEs), including those owned or led by women (WMSMEs). Portfolio diversification will contribute to SQB's transition into a fully universal commercial bank by serving a broader customer segment. ADB will also provide technical assistance to help SQB implement its transformation roadmap. “ADB fully supports the Government of Uzbekistan in its transformation to a vibrant and inclusive market economy and its implementation of banking sector reforms”, said ADB’s Director General of the Private Sector Operations Department, Suzanne Gaboury. “This project will support the stability of the country’s banking system, capitalization and deposit levels, while strengthening resilience and lending to climate projects and underserved MSMEs and WMSMEs”. According to ADB’s Uzbekistan Country Director, Kanokpan Lao-Araya, “MSMEs continue to struggle to secure commercial financing to fund their growth, with women-owned enterprises being the most affected. ADB is supporting an enabling environment in Uzbekistan for MSMEs gain easier access to markets, as well as providing much needed financing to close the financing gap for MSMEs. ADB’s partnership with SQB builds on those two objectives”. MSMEs play a significant role in Uzbekistan’s economy, comprising the majority of registered businesses and employing 74% of the workforce. However, access to financing remains a challenge, with only 13% of the sector having access to commercial loans. Women-led businesses face an even greater financing gap, estimated at $2.7 billion, with loans to women-owned businesses making up just 2.5% of total bank loans.