The European Bank for Reconstruction and Development (EBRD) has extended a USD 5 million credit line to HamkorBank, an open joint-stock commercial bank in Uzbekistan, to increase the availability of financial services to micro- and small enterprises (MSEs).
According to a press release by EBRD, state-owned banks, who control 85 percent of market share, tend to exclude many MSEs from accessing loans, due to a perceived high risk of default. Thus, the credit line will help HamkorBank, one of Uzbekistan’s few competitive private banks, to provide these sidelined businesses with financing. The EBRD has, previously, distributed a total of USD 18 million to HamkorBank.
About the EBRD:
The European Bank for Reconstruction and Development (EBRD) is, according to its website, “the first international financial institution of the post Cold War period.” Headquartered in London, the bank began operations in 1991 upon the agreement of 40 countries and is now “owned by 61 countries and two intergovernmental institutions.” It aims to “finance operations that are both commercially viable and assist development” in 29 countries in Central 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).
About HamkorBank:
HamkorBank is registered as a joint-stock commercial bank that was established in Uzbekistan in 1991. The bank aims to provide access to credit to any customer or business, “regardless of their type of activity and size of business.” It operates branches in the following cities in Uzbekistan: Andijan, Ferghana, Namangan, Tashkent, Bukhara, Termez, Samarkand, Karshi and Urgench. HamkorBank has partnered with financial institutions, including the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), and also has worked with a number of correspondent banks throughout Eastern Europe.
Bibliography:
[1] EBRD Press Release. “EBRD financing for micro and small businesses in Uzbekistan.” http://www.ebrd.com/new/pressrel/2009/091222b.htm
[2] EBRD.
[3] Hamkor Bank.
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=HamkorBank
Original Article: EBRD Press Release
22 December 2009
EBRD financing for micro and small businesses in Uzbekistan
$5 million equivalent credit line to Hamkor Bank
The EBRD is increasing further the availability of financing to private businesses in Uzbekistan with a $5 million credit line to Hamkor Bank for on-lending to micro and small enterprises (MSEs).
The banking sector in Uzbekistan is largely dominated by state-owned banks, which hold 85 per cent of the market share. Hamkor Bank is one of the leading private banks in Uzbekistan, with a wide geographical coverage.
The EBRD loan will help Hamkor Bank to develop further its lending activities, targeting micro and small businesses in the country, currently underserved by the large state banks.
The proceeds of the EBRD credit line will be used to finance investments and working capital of local businesses with medium-term loans, boosting the levels of banking intermediation in Uzbekistan.
“Through this transaction the EBRD is building on its successful cooperation with Hamkor Bank, aiming to increase the availability of the much needed financing and support the development of the private sector in Uzbekistan”, said Matthieu Le Blan, Head of the EBRD Office in Uzbekistan.
“The partnership with the EBRD is important to Hamkor Bank. This financing is dedicated to improve and develop the private sector in the country, increase Hamkor Bank’s loan porfolio and enhance other financial services. The utilisation of the new credit line will support the economy and ensure continued growth in the region”, said the Chairman of the Board of Hamkor Bank, Mr. Shahruh Hakimov.
Previously the EBRD has supported Hamkor Bank through various financing facilities with the total amount of $18 million.
Since the beginning of its operations in Uzbekistan, the EBRD has invested about €550 million into more than 50 projects in various sectors of the country’s economy.
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