Almaty, January 4, 2006
—In a major effort to strengthen the leasing industry in Azerbaijan, Kyrgyzstan, Tajikistan, and Uzbekistan, IFC, in partnership with Switzerland’s State Secretariat for Economic Affairs, has launched the Central Asia Leasing Facility’s technical assistance activity. This is a three-year, $2 million Swiss-funded program that aims to improve private sector economic growth, increase access to finance, and create employment through the development of leasing.
Leasing is a medium-term financial instrument that helps private enterprises procure productive assets, based on the proposition that profits are earned through the use, rather than ownership, of assets. Leasing providers focus on the borrower’s ability to generate cash flow from business operations to service the lease payment, not on their balance sheet or previous credit history. This is why leasing is particularly advantageous for new, small, and medium-size businesses that lack a long credit history and a significant asset base for collateral.
The Central Asia Leasing Facility currently provides assistance to 13 participating financial institutions engaged in leasing. At the industry level, the facility is working to improve the business climate by removing burdensome legal and regulatory obstacles that hinder the viability of leasing. At the institutional level, efforts strive to build capacity and strengthen systems within the individual financial institutions.
The new technical assistance activity is complemented by a $30 million IFC lease facility for on-lending to participating financial institutions, which in turn will originate leases for small and medium enterprises.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, promotes sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Its 178 member countries provide its share capital and collectively determine its policies.
From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
About seco
The State Secretariat for Economic Affairs (seco) is the Swiss Confederation’s competence center for issues related to economic policy. Its aim is to create the basic regulatory and economic policy conditions to enable business to flourish for the benefit of all. The secretariat represents Switzerland in multilateral trade organizations and international negotiations. It is also involved in efforts to reduce poverty and help developing countries with transition economies build a sustainable democratic society and viable market economy. Each year Switzerland spends about 1.7 billion francs on economic development cooperation and transition assistance to countries.
