MICROCAPITAL.ORG STORY: EBRD Becomes Shareholder in Tajikistan’s Agroinvestbank

The European Bank for Reconstruction and Development (EBRD) is acquiring 25 percent plus one share stake in Agroinvestbank of Tajikistan for up to TJS 50 million (USD 12 million). Agroinvestbank and EBRD have worked together previously through the EBRD Tajik and Micro and Small Enterprises Framework (TMSEF), the EBRD Trade Facilitation Programme (TFP), and the EBRD Tajik Agriculture Finance Framework (TAFF). [4]

Agroinvestbank first participated in TMSEF in 2005. TMSEF aimed to enhance Agroinvestbank’s participation at the micro-credit market, which resulted in expansion of access to loan resources for small and medium business, particularly in rural and mountainous regions. During implementation of the program from 2005 to 2009, nearly 18 thousand credits have been disbursed at the total amount USD 73 million. [3]

Agroinvestbank first joined the EBRD’s TLP in 2005. This program allowed the bank to begin trade finance with banks in Europe, Russia and Kazakhstan. Since 2008 the total sum of the committed credit lines for the security provisioning in the framework of the TLP for Agroinvestbank has comprised USD 10 million. During 2005-2009 Agroinvestbank has financed 407 transactions of its clients under the TFP for the total amount of USD 100.3 million, including 200 transactions for USD 45 million under the stand-by letter of credit of EBRD. [3]

The implementation of the new Tajik Agricultural Finance Facility (TAFF) program, which established a USD 6 million credit line for Agroinvestbank, began in December 2007. The purpose of this program is a credit support of the agrarian sector of the Republic of Tajikistan, in particular, farms specializing in production of crops. [3]

The EBRD supports projects in 30 countries in Central Europe and Asia. It was established in 1990 and is headquartered in London. The bank’s mission is to finance commercially viable projects and assist in development. It promotes microfinance through its MSME Program where it conducts programs through financial intermediaries. The EBRD has provided more than EUR 14.8 billion (USD 20.69 billion) through this program including over 3.1 million MSME loans in 19 countries. The EBRD has 42 projects in Tajikistan, with a total project value of EUR 138.1 million (USD 207 million). Approximately 74 percent of these projects are in the private sector. [2]

Agroinvestbank, a commercial bank based in Dushanbe, has over USD 235 million in total assets, a return on equity of 4.12 percent, 57 branches and approximately 20,000 active borrowers throughout Tajikistan. About 22.9 percent of its operations are comprised by microfinance. [1][4] Read more Microcapital.org articles about EBDR’s involvement in Tajikistan in the bibliography sections [5]-[7] below.

By Kenny Kline, Research Associate

Additional Resources:

[1] Agroinvestbank

http://www.agroinvestbank.tj/eng/

[2] European Bank for Reconstruction and Development

http://www.ebrd.com/about/index.htm

[3] Agroinvestbank press release

http://www.agroinvestbank.tj/eng/

[4] EBRD Press Release

http://www.ebrd.com/new/pressrel/2009/090812.htm

[4] The Mix Market

http://www.mixmarket.org/mfi/agroinvestbank/data