TASHKENT, Uzbekistan, October 12. The European Bank for Reconstruction and Development (EBRD) is exploring the possibility of providing a three-year senior unsecured loan of up to $25 million to Joint Stock Commercial Bank with Foreign Capital Hamkorbank under Uzbekistan's Green Economy Financing Facility II, Trend reports.
The approval date is scheduled for October 27, 2023.
The loan will be provided in two tranches ($15 million and $10 million) and may be available in the synthetic local currency (Uzbekistan Sum) or US Dollar. The total cost of the project amounts to $40 million.
The proceeds will be used to finance eligible MSMEs (micro, small, and medium enterprises) in accordance with the standard requirements set in the Policy Statement for the Financial Intermediary Framework (FIF).
The MSME Loan III will enable Hamkorbank to maintain diversification of its funding base, extend the duration of its liabilities, and expand the financing of MSMEs in Uzbekistan at a multiple of the EBRD financing.
The project contributes to the objectives of the FIF by supporting competitive and resilient transition qualities. FIF seeks to (i) foster MSME competitiveness by increasing the availability of financing and (ii) contribute to the competitiveness of financial institutions by enabling innovation in strategy, products, processes, and marketing related to MSME lending.
By ensuring that banks have adequate underwriting and risk management practices in place, the FIF also seeks to encourage sustainable lending practices, supporting the resilience of the financial system.
Hamkorbank, founded in 1991, is a leading privately owned bank in Uzbekistan. In 2022, the bank ranked 10th largest among 31 banks, with a market share of 3 percent of total assets. The bank has a well-diversified product range serving corporate, MSMEs, and retail customers with a strong regional outreach.
Meanwhile, following the reengagement with Uzbekistan in late 2017, the EBRD approved a 5-year country strategy in 2018.
According to the head of the EBRD office in Uzbekistan, Andi Aranitasi, those priorities included the enhancement of competitiveness by strengthening the role of the private sector’s role in the economy, as well as the promotion of green energy and resource solutions across sectors.