MICROCAPITAL BRIEF: International Finance Corporation (IFC) Loans $15m to Eskhata Bank of Tajikistan to Fund Small, Medium-Sized Enterprises (SMEs)

The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, has announced that it will loan the equivalent of USD 15 million to Eskhata Bank, a commercial bank in Tajikistan. The funding will consist of a subordinated loan of USD 10 million and a senior loan of USD 5 million denominated in Tajik somoni (TJS) to be on-lent to small and medium-sized enterprises that operate in the agriculture and trade sectors. The goal of the loans is to contribute to job creation “in the core sectors of the Tajik economy”[1] and it will promote economic growth in the country.

Mr Khurshed Nosirov, the CEO of Eskhata Bank, said that “the private sector is the engine of growth, and it must have access to finance if it can fulfill its role”[1]. He added that “IFC’s long-term funding will help us increase the supply of affordable credit to more micro and small businesses, helping them grow and create jobs”[1]. Mr Aftab Ahmed, the head of IFC’s Europe, Middle East and North Africa division’s financial institutions group, said, that “the limited availability of funding, especially in the local currency, constrains business opportunities for SMEs. This IFC investment will help Eskhata Bank meet the needs of SMEs in regards to long-term local currency funding”[1].

IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013. In Tajikistan, IFC invested USD 133 million in the country’s financial, hydro power, retail, tourism and manufacturing sectors between 1997 and 2014. IFC provided advisory services as well as loans and trade finance lines in total value of USD 25 million to Eskhata Bank between 2005 and 2014. As of June 30, 2014, Eskhata Bank reported total assets of USD 279.7 million, a gross loan portfolio of USD 152.8 million, total deposits of USD 76.7 million, return on assets of 4.58 percent and return on equity of 38.09 percent. It has 46,000 active borrowers and 88,000 depositors as of June 30, 2014.

By Alíz Crowley, Research Associate

About Eskhata Bank

Established in 1993 in Tajikistan, Eskhata Bank is headquartered in the city of Khujand. Eskhata Bank is a commercial bank that provides loans, savings, cash and fund transfer services. The bank has 20 branch offices, 85 banking centers and 324 money transfer points in Tajikistan. As of June 30, 2014, Eskhata Bank reported total assets of USD 279.7 million, a gross loan portfolio of USD 152.8 million, total deposits of USD 76.7 million, return on assets of 4.58 percent and return on equity of 38.09 percent. It has 46,000 active borrowers and 88,000 depositors as of June 30, 2014.

About International Finance Corporation

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013.

Sources and Additional Resources

[1] International Finance Corporation, News, IFC, Eskhata Bank to Expand SME Finance in Tajikistan

MicroCapital, September 5, 2014, Incofin, Triodos Invest in Microfinance Institution (MFI) Arvand of Tajikistan

MicroCapital, August 16, 2014, World Bank Group Donating $22m to, Investing $2m in Agriculture Commercialization in Tajikistan

MicroCapital, July 12, 2010, responsAbility Global Microfinance Fund and responsAbility Mikrofinanz-Fonds Loan $2m to Microfinance Institution (MFI) Eskhata Bank in Tajikistan

MicroCapital Universe Profile: Eskhata Bank

MicroCapital Universe Profile: International Finance Corporation

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