The European Union (EU) and the European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, England, recently launched the Enhanced Competitiveness of Tajik Agribusiness Programme (ECTAP), for which they are seeking to raise EUR 42 million (USD 46.5 million) to boost agricultural productivity in Tajikistan via local financial service providers. The EU will support ECTAP with EUR 9 million (USD 9.8 million) in the form of “investment grants and a risk-sharing facility” and an additional EUR 800,000 (USD 870,000) for technical assistance for recipient financial institutions. EBRD will extend loans through ECTAP worth up to EUR 20 million (USD 21.8 million), and a second, unspecified development bank is expected to contribute the balance. Eighty percent of the financing will be disbursed to institutions operating outside of Tajikistan’s capital, Dushanbe.
The first phase of the program involves EUR 15 million (USD 16.3 million) from EBRD and EUR 3 million (USD 3.3 million) in EU “investment grants” to be on-lent to micro-, small and medium-sized enterprises (MSMEs) to support crop diversification and machinery upgrades. Arvand, which offers credit and savings products to MSMEs from its headquarters in the city of Khujand, is the first program beneficiary, receiving the equivalent of USD 2 million in local currency. Approximately one-third of Arvand’s USD 31.2 million gross loan portfolio is comprised of agribusiness investments. As of 2015, Arvand reports total assets of USD 47.6 million and total deposits of USD 4.8 million.
During 2015, EBRD invested EUR 9.38 billion (USD 10.5 billion) in 381 projects in 36 countries, and as of December of that year it reported total members’ equity of EUR 14.6 billion (USD 16.3 billion).
By Michelle Dold, Research Associate
About the European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank, which began operations in 1991 upon the agreement of 40 countries, is owned by 65 countries as well as the European Investment Bank and the European Union as of 2016. It aims to finance operations that are both commercially viable and assist development in Central and Western Asia, Eastern Europe and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). During 2015, EBRD invested EUR 9.38 billion (USD 10.5 billion) in 381 projects in 36 countries, and as of December of that year it reported total members’ equity of EUR 14.6 billion (USD 16.3 billion).
Arvand is a microcredit deposit-taking organization (MDO) headquartered in Khujand, Tajikistan, that was founded in 2002 by Agricultural Cooperative Development International/Volunteers in Overseas Cooperative Assistance (ACDI/VOCA), a US-based nonprofit that implements “sustainable development” projects related to raising capital for and building the capacity of entrepreneurs in 33 countries as of 2016. Arvand provides credit, savings and remittance services as well as business training to low-income individuals and microenterprises. As of 2015, Arvand reported to the US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 31.2 million and 37,000 active borrowers. As of the same year, it reported total assets of USD 47.6 million, total deposits of USD 4.8 million and 22,000 depositors.
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