WASHINGTON, D.C., September 28, 1999
- The International Finance Corporation today signed agreements to provide a US$25 million credit line that will bolster two banks in Uzbekistan as well as provide a rare source of long-term financing for the fledgling small business community.
IFC will extend loans of up to US$15 million to the National Bank of Uzbekistan and up to US$10 million to Asaka Bank, the two financial intermediaries for the credit line.
The two banks will, in turn, make sub-loans from US$50,000 to US$2 million to small and medium enterprises in Uzbekistan to finance capital expenditures, expansion, modernization, spare parts, training programs, and to provide working capital. IFC's credit line will also strengthen the banks' ability to undertake project finance, structuring, environmental review and supervision.
Mr. Jemal-ud-din Kassum, IFC Vice President for Investment Operations, said that the project addresses the severe shortage of international financing and this first credit line to Uzbek banks reflects IFC's commitment to foster private sector development in Uzbekistan by assisting small and medium enterprises, developing the financial sector, and enhancing the business environment for private investment.
One of the major constraints for the development of small and medium private enterprises in Uzbekistan is their limited access to financing. IFC's credit line will make available long-term hard currency financing to these smaller companies. At the same time, the credit line will help to develop the country's financial sector by providing both funding and the technical skills for the two banks to engage in project-based financing.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
