Washington D.C, December 5, 2002—In an innovative project aimed at boosting small and medium enterprise (SME) development in central Kazakhstan, the International Finance Corporation (IFC) has joined with Ispat Karmet, a leading local company belonging to the LNM Group, to launch a US$6.9 million SME linkage resource.

The Ispat Karmet Small and Medium Enterprise Resource will help SMEs in Karaganda Oblast of central Kazakhstan to establish and consolidate sustainable linkages with Ispat Karmet, one of the largest integrated steel mills in the Commonwealth of Independent States.  There will also be a technical assistance program to support local SMEs as they seek to expand and modernize their businesses.

The SME resource will contribute to much-needed job creation in the region by expanding the access of smaller suppliers into the chain of Ispat’s vendors and by helping the existing small suppliers develop. Driven by the mutual interests of the SMEs and Ispat, this facility will help increase the volume of supplies from local SMEs on a commercial, sustainable basis, with the long-term goal of assisting them to diversify their market beyond Ispat Karmet.

Khosrow Zamani, IFC’s Director of Southern Europe and Central Asia Department, said: “The establishment of this linkage resource is a win-win proposition. Local SMEs will benefit from the technical assistance and funding that will help their businesses grow and Ispat Karmet will benefit from a new generation of efficient vendor relationships.”

Mr. Zamani added: “Small and medium enterprise growth is a critical tool for economic development and sustainable job creation in Kazakhstan and throughout Central Asia. A key objective of this facility is to help develop profitable, sustainable SMEs, which reflects a major goal of IFC’s regional strategy. IFC will continue to support initiatives and make investments that support the growth of SMEs throughout Central Asia.”

Ispat Karmet has significantly contributed to the private sector business environment in Karaganda, an industrial region that became impoverished following the collapse of the former Soviet Union. Since 1995, its successful operations have had a positive impact, directly and indirectly, on the well-being of about a million people in the Karaganda Oblast.

Mr. Nawal Kishore Choudhary, General Director and CEO of Ispat Karmet, said: “Apart from expanding the local vendor chain to Ispat Karmet, the SME Resource is a major initiative of a responsible corporate citizen toward national industrial development through medium and small entrepreneurs and will also supplement the import-substitution drive undertaken by the government of Kazakhstan.”

IFC’s mission (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, and provides technical assistance and advice to governments and businesses.  Since its founding in 1956, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries.  IFC’s committed portfolio at the end of FY02 was $15.1 billion.