BISHKEK/WASHINGTON D.C., March 22, 2004—
The International Finance Corporation, the private sector arm of the World Bank Group, today signed a $1.5 million loan agreement with Investment Export-Import Bank (Inexim), a Kyrgyz commercial bank providing credit and other financial services to local micro and small enterprises. The European Bank for Reconstruction and Development (EBRD) previously provided a $1.0 million loan to Inexim and in cooperation with IFC, will also provide a further $1.5 million loan to IneximIn cooperation with IFC, the European Bank for Reconstruction and Development (EBRD) has also provided a $1.5 million loan to Inexim, making the signing a $3 million loan agreement.
IFC signed the loan agreement under the Kyrgyz Micro and Small Enterprise Finance Facility (MSEF), run along lines similar to the EBRD’s small business programs in Russia and Kazakhstan. The facility is expected to provide some $10 million in credit lines to Kyrgyz banks for expanding lending to micro and small enterprises. Over 3,000 loans worth around$ 6 million have been disbursed to micro and small enterprises in Bishkek and its surrounding suburbs of Tokmok and Karabalta, Osh, Dzhalal-Abad, and the Issyk-Kol regions since the MSEF began in April 2002.
IFC’s loan to Inexim underscores its strategy of strengthening local financial institutions in the Kyrgyz Republic and Central Asia to support private sector development. Providing access to capital is key to IFC’s small business development strategy and will help boost private sector wealth and job creation, lift confidence in the banking sector, and strengthen banking by introducing commercially oriented microfinance techniques.
The MSEF is co-financed by EBRD/ IFC and US and the Swiss Governments. MSEF is supported by intensive technical assistance funds provided by European Union and USAID. The program is designed to effectively address the finance needs of Micro and Small Enterprises and training needs of the banks by long term funding and technical assistance efforts provided by EBRD, IFC and their partners.
Khosrow Zamani, IFC Director for Southern Europe and Central Asia, said, "IFC is committed to strengthening the financial sector in the Kyrgyz Republic, because financial institutions such as Inexim are key to nurturing the growth of micro and small businesses.”
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
