IFC finances Uzbekistan's Ipoteka Bank to support privatization, increase lending to SMEs

Finance Materials 23 June 2020 11:34 (UTC +04:00)
IFC finances Uzbekistan's Ipoteka Bank to support privatization, increase lending to SMEs

BAKU, Azerbaijan, June 23


International Finance Corporation (IFC) provides Uzbekistan’s Ipoteka Bank with a loan in Uzbek som, equal to $35 million, to support the privatization of the bank and increase lending to small and medium-sized enterprises (SMEs) in Uzbekistan, Trend reports citing uzreport.news.

In addition, the transformation of the Ipoteka Bank will serve as an example of the privatization for other state-owned banks and will assist in more active participation of private investors in the banking sector of Uzbekistan, said the report.

The partnership of Uzbekistan with IFC is consistent with the banking system reform strategy that was recently approved by President Shavkat Mirziyoyev, said Deputy Prime Minister of Uzbekistan Jamshid Kuchkarov.

Financing by IFC is an important recognition of the transformation work that Ipoteka Bank has been conducting over the past three years, aimed at commercializing the bank's operations and transforming it into an autonomously functioning financial institution.

As part of the efforts to reform the banking sector, the state intends to transfer its share in state-owned banks to investors. It is expected that the privatization will attract private capital, international experience and modern technologies that will have a positive impact on the bank and its customers.

Currently, the concentration of state-owned banks in the banking sector of Uzbekistan is high; five out of 30 banks in the country are wholly owned by the state, and in the eight banks the state owns a 50-percent share.

Georgina Baker, IFC Vice President for Europe, Central Asia, Latin America and the Caribbean, noted that IFC’s funding, along with consulting services provided over the past years, is part of the corporation's efforts to support reforms and increase participation of private sector in the financial sector of Uzbekistan.

Investments will help Ipoteka Bank to effectively implement the plan aimed at attracting the private sector to capital and expanding lending to SMEs throughout the country, which is a necessary measure in the current challenging conditions.