EDB to Finance Micro-credit Programme in Tajikistan
Almaty, 22 September 2010. Today in Dushanbe the Eurasian Development Bank signed a loan agreement with Tajpombank on financing a micro-credit programme in Tajikistan. This loan of $3 million will be disbursed in three tranches over a year.
Tajpombank will select sub-borrowers – companies meeting certain criteria, e.g. the number of staff (not more than 25 people), and individual businesspeople. Sub-loans ranging from $1,000 to $50,000 will be provided for a term of up to 12 months.
In Tajikistan’s difficult economic situation, micro-credits are given special attention, as they are viewed as a priority vehicle for stimulating small and medium-size businesses and economic rehabilitation in general. Therefore, all the national banking system is mobilised for coping with this task. Particularly, Tajprombank intends to increase the share of micro-credits in its loan portfolio to 75%.
This project of the EDB and Tajprombank will create favourable conditions for the development of micro- and small-sized businesses in Tajikistan, competition, production, and range and quality of products and services. Thus, small business development will have profound effect on the development of market economy in Tajikistan.
“This is the EDB’s first project in the field of micro-credit in the member states; it will be implemented under the EDB’s Programme of Support of Small and Medium Size Businesses by Providing Target Loan Facilities to Financial Institutions approved in this summer”, said Marat Dzhaukenov, Deputy Chairman of the EDB Executive Board / Managing Director on Investments. “For Tajikistan, this is the second event of this kind. It was Tajpombank that since 2004 received from the EBRD two loans for the development of micro-credit for a total of $6 million”.
Summary
The Tajik Joint Stock Commercial Industrial Bank of Reconstruction and Development (Tajprombank) was founded in 1995. This universal private bank ranks sixth in terms of assets ($67 million) in Tajikistan (as at 01.01.2010). Its branch network is one of the largest in the country and includes 21 branches, 12 departments and 47 money transfer offices. Its core business is micro-credit and money transfer operations. In 2009 the EDB appointed Tajprombank its agent bank for implementing the EDB’s first investment project in Tajikistan to finance the construction of a spinning mill by Olim-Textile.