Azerbaijan, Baku, May 15 / Trend , N.Ismayilova/
The European Bank for Reconstruction and Development (EBRD) is considering to provide a credit line of USD 13 million to Azerdemiryolbank to support the Azerbaijani economy via credits to the country's micro and small and medium-sized business sectors, the EBRD reported. The European Bank's Board of Directors is expected to approve the loan on June 16.
Of the total, $3 million will be provided for SME lending and $10 million for lending to the micro sector.
The proposed credit line is supporting EBRD's country strategy for Azerbaijan and will further support the increase of financial intermediation in the market and promote competition.
"Supporting the development of the private companies and banking sector in Azerbaijan by increasing medium-term financing to the productive sector of the economy through domestic banks would facilitate the strengthening of domestic production," the report says. "Furthermore, the loan will increase availability of funds to Azerbaijani small and medium-sized companies to facilitate their expansion."
The technical assistance programmes are being funded by ETC Multi Donor Initiative Fund and the EBRD Shareholders Special Fund.
The EBRD approved the loan worth $14 million for Azerdemiryolbank in May 2008. Regarding this loan, the EBRD's portfolio on financing Azerdemiryolbank reaches $37-38 million.
Azerdemiryolbank, one of the first commercial banks in the country, was established in 1989 by the Azerbaijan State Railway. Since 1995, the bank's main shareholder is the Hajiyev's family (currently owns nearly 46 percent of the shares). EBRD and the Netherlands Development Finance Company collectively owned 35 percent shares of the bank. Since December 2005, the EBRD has acquired 25 percent plus one share bank. Azerdemiryolbank first private banks in the country which began to receive international ratings since 2004.
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