Tashkent, Uzbekistan, April 10, 2018—IFC,
a member of the World Bank Group, has signed a landmark swap agreement
with Hamkorbank, the largest private bank in Uzbekistan, to expand local
currency lending to micro, small and medium enterprises, key to driving
economic growth in the country.
Under the agreement, IFC will hedge Hamkorbank’s
currency exposure for up to $40 million—the first international financial
institution to provide such hedging instruments in Uzbekistan. The transaction
will enable Hamkorbank to better manage its assets and liabilities amid
scarce hedging opportunities. When firms borrow in the currency of their
revenue, they can avoid foreign exchange risk and focus on expanding and
“The transaction is very important for Hamkorbank
as it will enhance our ability to lend to customers in local currency,
while effectively managing our currency risk exposure and reducing the
credit risk of the loan portfolio,” said Ikram Ibragimov, Chairman of
the Supervisory Board of Hamkorbank. “We are delighted to be the first
bank in Uzbekistan receiving access to IFC’s risk management instruments.”
IFC Vice President and Treasurer Jingdong
Hua reaffirmed IFC’s commitment to Uzbekistan’s private sector during
a visit to the country, where he emphasized the need to strengthen local
capital markets for economic growth.
“Long-term local currency financing is a powerful tool to expand access
to credit for businesses in infrastructure, manufacturing, agribusiness
and social sector, as well for small and medium enterprises—all of which
rely on local currency revenues,” he said. “This important agreement
reflects IFC’s commitment to expand access to finance for local entrepreneurs
through capital market innovations.”
Since the inception of the local currency
lending program in the early 2000s, IFC has extended more than $16 billion
in financing to its clients globally, in more than 50 currencies including
the Chinese renminbi, Brazilian real, South African rand, Turkish lira,
Kazakh tenge, Tajik somoni, Armenian dram, Azerbaijani manat, Georgian
lari, and Russian ruble.
IFC has provided Hamkorbank with more than
$20 million in debt, equity and trade finance since 2001. IFC has also
helped the bank develop prudent risk management practices, build capacity
to finance agri-businesses, and introduce international best practices
in several areas, including corporate governance, SME banking, HR management,
asset and liability management (ALM) and treasury, internal control and
audit, monitoring, branch management, and management information systems.
Joint-Stock Commercial Bank Hamkorbank is
the largest private bank in Uzbekistan. Over 27 years the bank has developed
the expanded branch network, covering all administrative regions of the
Republic of Uzbekistan. The bank transformed into a nation-wide financial
institution, offering more than 50 financial products and services. It
has a nationwide network of 33 full-service branches for consumer transactions.
For more information, please visit www.hamkorbank.uz
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org.