MICROCAPITAL STORY: New Microfinance Institution AccessBank Tajikistan Established with Investments Totaling USD 11 million from Access Microfinance Holding, the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), and Kreditanstalt fuer Wiederaufbau (KfW)

Several international finance organizations have invested in a new microfinance institution, AccessBank Tajikistan. Access Microfinance Holding AG (AccessHolding) will hold a majority stake in the new bank, and international investors including the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and Kreditanstalt fuer Wiederaufbau (KfW) will invest a total of USD 11 million for equity stakes. AccessBank Tajikistan will launch operations in late 2009 in the Tajik capital, Dushanbe.

The microfinance sector in Tajikistan has been growing at an unprecedented rate, with the number of active borrowers nearly tripling in the last two years (read more in this MicroCapital Story). Yet, as a result of the financial crisis and liquidity constraints, many Tajik banks have been unable to provide new loans to customers. The EBRD estimates that there are over 500,000 micro and small enterprises (MSEs) currently operating in Tajikistan, which are particularly affected by the lack of access to credit. Upon its launch in late 2009, AccessBank Tajikistan will provide much needed lending to these MSEs. The bank will offer both business micro-loans and agribusiness loans, and they plan to later expand to offer products including micro-leasing, microinsurance, and credit cards. To facilitate access to finance for entrepreneurs in rural areas, AccessBank will develop a strong regional presence in Tajikistan and plans to open 17 branches outside of the capital.

Access Microfinance Holding AG (AccessHolding) is a commercial microfinance holding company that invests in microfinance institutions (MFIs) through equity finance and holding services. AccessHolding also provides management services through their technical partner LFS Financial Systems GmbH (LFS). Since its inception in August 2006, AccessHolding has invested in four microfinance banks – AccessBanque Madagascar, AccessBank Azerbaijan, AccessBank Tanzania, and AB Microfinance Bank Nigeria Ltd. The establishment of AccessBank Tajikistan is representative of AccessHolding’s investment philosophy; with a 50.5 percent stake in the new bank, AccessHolding is a strategic investor that “shapes and controls investee companies.” Currently a Joint Stock Company under German law, AccessHolding aims to become a parent company of a global network of microfinance banks with a common brand identity.

The EBRD, founded in 1991 and headquartered in London, is an international financial institution that supports private sector development in central Europe and central Asia. The EBRD promotes microfinance through its Micro, Small and Medium Business Program, and since it was established has provided more than EUR 14.8 billion (USD 20.8 billion) to support micro, small and medium-sized enterprises. In the past two years alone, the EBRD has dedicated over USD 1 billion to microfinance programs; read more in this MicroCapital story. The EBRD has invested USD 2 million in AccessBank Tajikistan, for an 18 percent stake in the new company. This brings EBRD’s total investment in the Tajik financial sector to EUR 54 million (USD 76 million).

The IFC, a member of the World Bank Group, provides investments and advisory services to build the private sector in developing countries. The IFC has taken an 18 percent stake in AccessBank Tajikistan, with an investment of USD 2 million. Alongside the start-up capital, IFC will also provide advisory services to support the capacity building phase of the project. The IFC has participated as a founding shareholder in over 20 microfinance banks; read more about IFC investments in microfinance in this MicroCapital story.

KfW is a development bank that finances investments on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). KfW has invested USD 1.5 million in AccessBank Tajikistan, for a 13.5 percent stake. KfW supports microfinance through its Financial Sector program activities, promoting over 100 microfinance projects in 60 developing or transition countries. Read more about KfW’s investments in the sector in this MicroCapital story.

By Jaclyn Berfond, Research Assistant

Additional Resources:

EBRD Press Release: EBRD boosts microfinancing in Tajikistan

IFC Summary of Proposed Investment: AccessBank Tajikistan JSC

Access Microfinance Holding AG: Homepage

MicroCapital Story: European Development Finance Institutions Part 1: European Bank for Reconstruction and Development (EBRD) Invests Over USD 1 Billion in Microfinance Initiatives Since 2007

MicroCapital Story: International Finance Corporation (IFC) Invests over $514m in Micro Small and Medium Enterprise (MSME) Initiatives During 2008

MicroCapital Story: European Development Finance Institutions Part 2: KfW Entwicklungsbank Remains One of the Largest Global Investors in Microfinance