MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans $10.5m to Bank Respublika to Support Micro-, Small and Medium-Sized Enterprises in Azerbaijan

The European Bank for Reconstruction and Development (EBRD) recently made loans totaling USD 10.5 million to Bank Respublika in Azerbaijan. Since the beginning of its operations in Azerbaijan, “EBRD has invested some EUR 1.2 billion (USD 1.57 billion) in about 120 projects, with over 60 percent of the projects being investments into the development of the private sector.”

Within Multi-Bank Framework Facility, the European Bank for Reconstruction and Development (EBRD) makes loans to several Azerbaijani banks, including Bank Respublika, on a condition that funds are lent out again to micro-, small and medium-sized enterprises (MSMEs). A total of USD 6 million was given to several Azerbaijani banks in 2009, and in 2008, a mortgage loan agreement for a total of USD 10 million was signed, which is used to assist in developing Azerbaijan’s mortgage market.

Of the USD 10.5 million that Bank Respublika received from EBRD recently, USD 3 million will be used to help private entrepreneurs finance their investments. USD 6 million will finance private homes, and the rest will provide a credit line under the Medium-Sized Co-financing Facility Framework.

By Paul K. Kim, Research Associate

ABOUT European Bank for Reconstruction and Development (EBRD):

The European Bank for Reconstruction and Development (EBRD) is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe and Central Asia. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses as well as commercial banks and non-bank microfinance institutions (MFIs). Operating assets for fiscal 2009 were EUR 6.1 billion (USD 8 billion).

ABOUT BANK RESPUBLIKA:

Respublika Bank of Azerbaijan provides services primarily to small and medium-sized Enterprises (SMEs), local entrepreneurs and individuals. Respublika was established in 1992 as a private commercial joint-stock bank. Since 2002, the bank has made a strategic decision to aim for aggressive growth in cooperation with international institutions. Its longer-term strategy is focused on becoming a leader in SME and retail business and building an extensive branch network and a stable customer base.

SOURCES:

[1] Sergiy Grytsenko. “EBRD Continues Financing to Micro, Small and Medium-Sized Enterprises in Azerbaijan” December 16, 2010 http://www.ebrd.com/english/pages/news/press/2010/101216a.shtml

MicroCapital’s Microfinance Universe Profile: European Bank for Reconstruction and Development (EBRD) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+(EBRD)

MicroCapital.org Article, January 5, 2010: European Bank for Reconstruction and Development (EBRD) Provides $2.9m Loan to Union Bank in Albania for On-Lending to Small and Medium Enterprises (SMEs)
https://www.microcapital.org/microcapital-brief-european-bank-for-reconst…

MicroCapital.org Article, January 2, 2010: The European Bank for Reconstruction and Development (EBRD) Provides $5m Loan to Uzbekistan?s HamkorBank for Micro- and Small Enterprises (MSEs) https://www.microcapital.org/microcapital-brief-the-european-bank-for-rec…

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