EBRD to provide financing program for Uzbek Ipak Yuli Bank amid Covid-19
BAKU, Azerbaijan, Sept. 14
By Klavdiya Romakayeva - Trend:
Small and medium-sized enterprises (SMEs) in Uzbekistan as well as domestic companies active in international trade will have additional funds available for their operations, thanks to a new financing program offered by the European Bank for Reconstruction and Development (EBRD) to Ipak Yuli Bank, the country’s major privately owned lender, Trend reports via press service of EBRD.
The financing package of up to $20 million will consist of two components: an SME credit line of up to $15 million equivalent and a trade finance limit increase of $5 million under the EBRD’s Trade Facilitation Program (TFP) to build on the successful cooperation in the TFP area.
The former will be disbursed either in Uzbek soum or in US dollars to cater to SME needs. Providing funding in local currency will limit the risks that borrowers face with regard to exchange rates.
The support of SMEs in Uzbekistan, where they create about 50 percent of GDP (gross domestic product) and employ almost 80 percent of the workforce, is particularly important for the EBRD and is one of its crisis response priorities.
The importance of trade has grown immensely since the outbreak of the coronavirus pandemic, as it helps firms to better manage commodity stocks and plan for longer trade cycles.
A $5 million TFP limit will help Ipak Yuli Bank to support domestic exporters and importers and to stimulate their business activity in the current difficult market conditions.
The financing program for Ipak Yuli Bank demonstrates the confidence of international financiers in Uzbekistan’s financial sector and their commitment to supporting privately owned players to foster the sustainability and competitiveness of the sector.
The EBRD launched two Solidarity Packages in response to the coronavirus pandemic and now expects to dedicate the entirety of its business investments of up to €21 billion in 2020-2021 to overcome the economic impact of the crisis.
To date, the EBRD has invested €1.8 billion through 81 projects in Uzbekistan’s economy.
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