Baku, Azerbaijan, Dec. 18
By Nigar Guliyeva – Trend:
The European Bank for Reconstruction and Development (EBRD) signed the risk sharing accord with the First MicroFinance Bank (FMFB), the EBRD reported.
From now on, loans to small and medium-sized enterprises (SMEs) in Tajikistan, which represent over 50 percent of the country’s labour force, will be available at a greater extend.
The FMFB has joined the EBRD’s Risk Sharing Facility (RSF), a special financing programme designed to share risk in loans provided to small and medium-sized companies. It is the second Tajik financial institution to join the facility.
Under the RSF, the EBRD and the FMFB signed a participation agreement of up to $ 1.5 million, whereby the EBRD is expected to share up to 50 per cent of the risk on individual sub-projects. This will allow the FMFB expand its lending to a greater number of companies, most of which are smaller businesses that would not otherwise have access to direct EBRD financing because of the size of loans they seek.
The FMFB’s participation in the RSF will help it gain the necessary experience in providing services to both existing and prospective clients. The FMFB will be able to offer domestic SMEs loans with longer maturities and will employ best lending practices. Under the RSF, the EBRD will also help FMFB introduce modern corporate governance standards, and improve its credit risk assessment, financial modelling and monitoring.
FMFB provides a full range of banking services through its nationwide network of 7 branches and 29 banking service centres. The network covers all regions of Tajikistan, including remote parts of the country, where the presence of other financial intermediaries is limited.
To date, the EBRD has invested over €608 million ($ 700 million) in various sectors of Tajikistan’s economy.