TASHKENT, Uzbekistan, October 13. The European Bank for Reconstruction and Development (EBRD) is exploring the possibility of providing a three-year senior unsecured loan of up to $10 million to Joint Stock Commercial Bank with Foreign Capital Hamkorbank under the Youth in Business Programme for Central Asia (CA YiB), Trend reports.
The approval date is scheduled for October 27, 2023.
The proceeds of the Bank's investment will be used for on-lending to eligible youth-led MSMEs in line with standard eligibility criteria set forth in the CA YiB policy statement. 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.
The CA 'YiB Loan I' will enable Hamkorbank to maintain further diversification of its funding base, and to finance youth-led businesses in Uzbekistan. Hamkorbank will benefit from a comprehensive technical assistance (TC) to develop the internal capacity for financing youth-led businesses and to contribute to the improvement in access to finance for youth entrepreneurs in Uzbekistan.
As part of the CA YiB, the 'YiB Loan I' to Hamkorbank will support Inclusive (primary) and Competitive (secondary) transition qualities through promotion of youth entrepreneurship and, more broadly, youth's active participation in business activities.
As per EBRD, taken together, these targets will contribute to improving access to finance for youth entrepreneurs in Uzbekistan which Hamkorbank may not have pursued otherwise.
Meanwhile, following the re-engagement 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.