EBRD to Support Azerbaijani Bank in Financing local businesses
Azerbaijan, Baku / corr Trend I.Khalilova / Micro, small and medium-sized enterprises (MSEs) in Azerbaijan will benefit from a $3 million loan to Bank of Baku for on-lending to local businesses. The EBRD will provide $2 million, while $1 million comes from the International Cooperation and Development Fund Taipei China (TaiwanICDF).
In addition, Bank of Baku will receive a $6.25 co-financing facility under the EBRD's Medium-Sized Co-Financing Facility Framework (MCFF).
The financing will help expand Bank of Baku's medium-term lending capacity to MSEs in a market where banks' and companies' access to longer-term financing is still limited. The size of the sub-loans will be between $10,000 and $100,000.
Aygen Yayikoglu, head of the EBRD's office in Baku, said that sustainable growth of small businesses is key for diversification of Azerbaijan's economy into non-oil and gas sectors, which is why it is important to strengthen the lending capacity of local banks and channel funds to local entrepreneurs.
Established in 2005 as a result of the merger between two local private banks, Bank of Baku is one of the top ten banks in Azerbaijan. It offers a wide range of products and services in areas such as consumer, commercial and international trade finance. The EBRD became a shareholder in 2005. Bank of Baku has also participated in the EBRD's Trade Facilitation Programme.
The $3 million loan is part of an overall $20 million multi-bank framework through which the EBRD is providing credits for MSME lending to banks in Azerbaijan. As a participant, Bank of Baku is also benefiting from technical assistance funded by the European Union's Tacis programme and the ETC Multi-Donor Fund.