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civil code and outdated decrees on leasing.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
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
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
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.