BAKU, Azerbaijan, June 7. The Presidium of the Asian Development Bank (ADB) approved a loan of up to 34 million manat ($19.9 million) for the Azerbaijani Bank Respublika OJSC in order to increase access to loans for women and borrowers working in the field of production, processing and trade in agriculture of Azerbaijan, Trend reports.
According to the ADB, the loan agreement is planned to be signed in the second quarter of 2023, and the funds will be allocated to Bank Respublika by the second quarter of 2024.
The loan will be provided by Bank Respublika for a period of three years in local currency or US dollars.
ADB notes that this deal will help stimulate domestic food production and reduce dependence on imports, especially due to ongoing events in Ukraine. Moreover, the loan will contribute to reducing income inequality between urban and rural areas.
Providing funding to ADB will also improve access to agricultural lending in Azerbaijan, which accounted for only 4 percent of the total volume of bank loans after the economic crisis in 2015, despite the fact that agriculture contributed 10 percent to Azerbaijan's non-oil GDP in 2022.
It is expected that this transaction will contribute to improving women's access to financial resources in Azerbaijan.
Bank Respublika will direct the funds of the ADB loan to finance sub-loans with a maximum amount of 300,000 manat (176,470).
ADB informs that Bank Respublika expects an increase in financial capacity to service borrowers in agriculture as a result of the implementation of this project, and in particular women, by 2026.
It is also expected to increase the ability of Bank Respublika to provide value-added services to meet the needs of customers, especially female borrowers, as well as to strengthen gender equality in hiring at the bank.
ADB believes that Bank Respublika is the optimal channel for expanding financial access to poorly serviced sectors and areas due to its wide network of 32 branches, including 19 in rural areas.