MICROCAPITAL BRIEF: Ipak Yoli Bank of Uzbekistan, IFC Collaborate to Manage Currency Risk, Increase Local-currency Financing for SMEs

The International Finance Corporation (IFC), a member of the World Bank Group, and Uzbekistan’s Ipak Yoli Bank recently signed an International Swaps and Derivatives Association Master Agreement under which they plan to execute currency-swap transactions. Saidabror Savdakhmedov, Chairman of the Board of Ipak Yoli, explained that the goal is to “help expand our lending to customers in local currency, while effectively mitigating financial risks and managing our currency-risk exposure.” In particular, the bank plans to increase local-currency financing to small and medium-sized enterprises (SMEs). IFC Regional Manager for Central Asia Cassandra Colbert commented that this is “critically important at a time when businesses are suffering currency vulnerabilities due to the global impact of the COVID-19 crises.”

Founded in 1990, Ipak Yoli has 16 branches, including eight in the city of Tashkent. The bank serves households, SMEs and large firms, including other financial institutions. For 2018, it reported profit of UZS 141 billion (USD 14 million) on assets of UZS 4.0 trillion (USD 394 million).

IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2019, it reported total assets of USD 94.3 billion.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2020, it has 189 member nations. The group encompasses: (1) the International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the year ending June 2019, the World Bank Group disbursed a total of USD 62.3 billion in loans, grants, equity investments, and guarantees to partner countries and private businesses.

By Andrew Janni, Research Associate

Sources and Additional Resources

IFC press release
https://ifcextapps.ifc.org/IFCExt/Pressroom/IFCPressRoom.nsf/0/A0ED93AC59175D768525856C002CAEEC

Ipak Yoli homepage
https://ipakyulibank.uz/

Ipak Yoli Bank audit report by Deloitte
http://openinfo.uz/media/msfo/%D0%90%D1%83%D0%B4%D0%B8%D1%82%D0%BE%D1%80%D1%81%D0%BA%D0%BE%D0%B5_%D0%B7%D0%B0%D0%BA%D0%BB%D1%8E%D1%87%D0%B5%D0%BD%D0%B8%D0%B5_2018_1.pdf

World Bank 2019 financials
https://www.worldbank.org/en/about/annual-report/fiscal-year-data

World Bank homepage
https://www.worldbank.org/

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