MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Establishes $2m Local Currency Credit Line for Bank of Asia

The UK-based European Bank for Reconstruction and Development (EBRD) recently opened a local-currency credit line equivalent to USD 2 million for the Bank of Asia Closed Joint Stock Company (CJSC), a public bank based in the Kyrgyz Republic, to support the bank’s micro-, small and medium-sized enterprise (MSME) clients. EBRD’s Early Transition Countries (ETC) Local Currency Loan Programme, which aims to help borrowers in early transition countries reduce exchange rate and insolvency risk and to increase local-currency lending, will provide the credit line. As a requirement of the ETC Local Currency Loan Programme, the Kyrygz government and Bank of Asia’s representatives signed a Memorandum of Understanding with ERBD to confirm their intentions to “reduce dollarization and strengthen their country’s capacity to intermediate savings and investments through the use of the Kyrgyz Som.”

Taalaibek Dzhumataev, the Chief Executive Officer of the Bank of Asia, lauded the fact that the increase in local-currency lending to the MSME sector in the Kyrgyz Republic will help the bank’s clients avoid exchange rate risks.

As of 2013, EBRD has invested USD 565 million in various sector projects in the Kyrgyz economy since 1993. In 2012, EBRD invested EUR 8.7 billion (USD 11.4 billion) in 388 projects across 34 countries. Financial information for the Bank of Asia from July 2013 is available in Russian at: http://www.bankasia.kg/images/123/31.07.2013.pdf.

By Adrija Vaiciulionis, Research Associate

About Bank of Asia:
The Bank of Asia is a closed joint-stock company that was incorporated in the Kyrgyz Republic in 1998. The bank has a network of six branches throughout the Kyrgyz Republic. The bank aims to contribute to the development of the economy and the local banking sector of the Kyrgyz Republic. Financial information from July 2013 is available in Russian at: http://www.bankasia.kg/images/123/31.07.2013.pdf.

About European Bank for Reconstruction and Development:
The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is owned by 61 countries as well as the European Investment Bank and the European Union as of 2012. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2012, EBRD invested EUR 8.7 billion (USD 11.4 billion) in 388 projects across 34 countries.

Sources and Additional Resources:

Svitlana Pyrkalo, “EBRD Channels Kyryz Som Equivalent of US $2 Million to MSMES through Bank of Asia,”
http://www.ebrd.com/pages/news/press/2013/130917.shtml

MicroCapital Article, June 11, 2013, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Considers $33m Loan to European Fund for Southeast Europe (EFSE) for Micro-, Small, Medium-Sized Enterprises,”
https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-considers-33m-loan-to-european-fund-for-southeast-europe-efse-for-micro-small-medium-sized-enterprises/

MicroCapital Article, November 14, 2012, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Lends $70m to Garanti Bank of Turkey, Hipotekarna Banka of Montenegro, Bai Tushum of Kyrgyz Republic,”
https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-lends-70m-to-garanti-bank-of-turkey-hipotekarna-banka-of-montenegro-bai-tushum-of-kyrgyz-republic-2/

MicroCapital Universe Profile: European Bank for Reconstruction and Development
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

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