Press Releases

Tajikistan Passes New Leasing Law To Support Small Businesses

In Dushanbe Office:
Ravshan Rashidov
Phone: +(992-372) 24-74-54

In Bishkek Office:

Rachel Freeman
Phone: +(996 312) 61 16 75


In Washington, DC:

Elika Trifonova

Phone: +202 475 8357 - Fax: +202 974 4384


Bishkek, April 28, 2003—Financing options for small and medium businesses in Tajikistan have improved considerably through a new leasing law adopted with the support of the International Finance Corporation, the private sector development arm of the World Bank, and the Swiss government, through the State Secretariat for Economic Affairs. The new law, enacted into law by presidential signature on April 21, 2003,  will assist in developing an important new financing mechanism for the country. Leasing, which in transitional markets is traditionally more accessible than bank credit, has been a  financing gap for Tajikistan’s small and medium enterprises, which often need new equipment and working capital for their operations but cannot obtain the long-term loans required to purchase the equipment.

Experts from the Swiss-IFC Partnership Central Asia Leasing Project office in Dushanbe, Tajikistan, and IFC helped the Tajik government draft the law, which  provides the necessary legal structure for banks and other financial institutions to conduct leasing operations.


“Tajikistan deserves commendation for passing this important laws,” said Christian Grossmann, IFC’s Director for the Private Enterprise Partnership, IFC’s technical assistance arm in the former Soviet Union.  “Not only will it have an immediate positive impact on SME growth, but the new law represents a significant step forward in building a favorable investment climate for IFC and other private investors in the leasing sector, which should bring much needed capital to the region.”

Leasing -- a key source of medium- and long-term financing particularly for SMEs in countries with transitional economies – is an economically efficient solution to the problem of asset acquisition. It enables credit risk to be based on projected generated cash flow rather than on credit history or collateral.  Leasing often provides a healthy boost to the small business sector, which is the key source of job creation in developing and transitioning economies.

The new law sets clear and transparent obligations and rights for all parties involved in leasing transactions and resolves contradictions in the Tajikistan civil code and outdated decrees on leasing. This clarity brings closure to many of the legal issues that have held back the development of leasing in Tajikistan.

According to Tajikistan Parliamentarian Gulomali Boyakov, who presented the law to the Parliament,  “We expect to see the birth of a vibrant leasing sector in Tajikistan, both from banks and from independent leasing companies. This step provides critical support to our small and medium enterprises, which are crucial to our country’s economic growth.”

Rakhmonali Amirov, director of the Tajikistan Anti-Monopoly Committee and Committee for the Support of Small Business, initiated the legislation.  “Small businesses in Tajikistan are celebrating today,” he said, “because now they will have a new way to finance their businesses.”

IFC has long championed of leasing for developing and transitioning economies. IFC has advised 39 countries on developing leasing and invested almost $1 billion in leasing operations in 50 countries over the past 30 years.

Initial funds to support leasing legislation in the Kyrgyz Republic were provided by the Japanese government, which financed a study of the leasing market as well as introductory seminars with government officials.  The Swiss–IFC Partnership,  launched in 2001 by the Swiss Secretariat for Economic Affairs (seco) and IFC, provided technical assistance and field support.

The Swiss–IFC partnership aims to promote private sector development in the Central Asian countries of the Kyrgyz Republic, Tajikistan, Uzbekistan, and Turkmenistan.  One of the first projects of the partnership is the Central Asia Leasing Project, which works closely with local governments to create an appropriate legislative environment, provide training and consulting services to local enterprises and foreign investors interested in using leasing, and launch a public campaign to educate private enterprises, financial institutions, and regulatory agencies about leasing.

IFC’s mission 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.   Since its founding in 1956 through 2002, 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 worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.

Switzerland participates in the international community’s efforts to help transitional countries build stable democracies and viable market economies.  Each year, Switzerland spends approximately SFr1.5 billion on development aid around the world, or about 0.34 percent of Switzerland’s gross national product.  This is a testimony to  Switzerland’s belief that long-term global security and prosperity can be achieved only by narrowing the gap between developed and transitional countries.

As for seco, its economic development cooperation program has four main objectives: (1) to help transitional countries reach the stage of development most favorable to growth and investment; (2) to mobilize private sector resources as a means of increasing the flow of finance to the transitional countries, as well as technology transfer; (3) to improve the productive and social infrastructure; (4) and to achieve greater integration of developing countries in international trade.