Press Releases

IFC Makes Investment in First MicroFinance Bank in Tajikistan

Washington DC:

Georg Schmidt

Phone: +1 (202) 458-2934

Fax:      +1 (202) 974-4384


Dushanbe/Washington, D.C., December 14, 2004—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement with the Aga Khan Development Network (AKDN) and Germany’s development bank Kreditanstalt fuer Wiederaufbau (KfW Entwicklungsbank) to invest in the First MicroFinanceBank of Tajikistan. First MicroFinanceBank, which began operations in July 2004 as the first full-service microfinance bank in Tajikistan, provides credit and savings products to micro and small enterprises.  The bank will build on the operations of the Aga Khan Development Network’s long-standing humanitarian and development programs in Tajikistan.  These operations currently constitute one of the largest providers of microcredit and microenterprise services in the country with over 7,000 clients, $1.5 million equivalent in outstanding loans and $6.3 million equivalent in total disbursed loans as of July 2004, and an average loan size of $1,300 equivalent.

Headquartered in Dushanbe, First MicroFinanceBank is expected to have a wide outreach and achieve financial sustainability within four years.  It has already begun receiving some of the donor support that will be necessary to overcome such challenges as security, the need for wider gender outreach, inadequate infrastructure, and the extensive requirements for capacity building and training of professionals in the microfinance sector.  Technical assistance has been provided through the Canadian International Development Agency in the amount of C$2.85 million to contribute toward staff training and management support.  In addition, KfW Entwicklungsbank (KfW Development Bank) will also arrange grant-based technical assistance in the amount of €1.5 million as well as a credit line for refinancing of sub-loans in the amount of € 1.5 million.

“We are really pleased to be part of this joint effort to create the very first microfinance bank in Tajikistan,” said Jyrki Koskelo, IFC’s director of Global Financial Markets. “The investment responds to the needs of the current and future backbone of Tajikistan’s economy, the small entrepreneurs who make a living for their families and lay the foundation for the future peace and prosperity of their country.”

Khosrow Zamani, IFC’s regional director for Southern Europe and Central Asia, added, “We want to encourage the growth of strong private sector enterprises in Tajikistan. Investing in local financial intermediaries is critical to achieve this aim. IFC will help jump-start the financial sector in Tajikistan and introduce international best practice in corporate governance, anti-money laundering, and gender outreach."

Aga Khan Foundation for Economic Development (AKFED) Director Iain Cheyne said, “We are committed to helping reduce poverty in Tajikistan. In this project, we expect to build upon and expand greatly our engagement in the country’s microfinance sector, through which we have been the largest providers of microfinance in Tajikistan.  Our experience with similar projects in the region and in several other countries will help us establish a sustainable and high-impact institution that responds well to the needs of the Tajik people, creating employment opportunities and helping alleviate social inequities.”

AKFED, the commercial arm of the Aga Khan Development Network (AKDN), helps build economically viable enterprises through long-term equity participation combined with professional management, technical expertise, and support. Its sustainable investments in industry, tourism, and financial services projects play an important catalytic role in mobilizing foreign institutional investors, especially in Asia. AKFED will bring to First MicroFinance Bank its broad expertise in commercial as well as development banking operations. AKFED is currently the lead shareholder in five banks in emerging markets, while AKDN has approximately 40 microfinance banks and programs in countries of Central and South Asia, the Middle East, and Africa.  IFC has worked with AKFED in over 20 projects in Africa as well as Central and South Asia and values it as a strong and committed partner. Most recently, IFC invested alongside AKFED in First MicroFinanceBank of Afghanistan.

KfW Bankengruppe Managing Director Wolfgang Kroh said, “The FirstMicroBank was founded to contribute to poverty alleviation and to economic growth through the provision of financial services to micro enterprises and low income households in Tajikistan.  The Bank will also serve small businesses which are expected to become the central source of economic growth and employment in Tajikistan for years to come.”

KfW Entwicklungsbank finances investments and accompanying consulting services in developing countries on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).  KfW Entwicklungsbank is committed to the primary goal of German development cooperation, namely to sustainably improve the economic and social conditions of the people in developing countries.  Through its Financial Cooperation (FC) it contributes to reducing poverty, protecting natural resources and securing peace worldwide.  On behalf of BMZ and on assignment from the European Union, KfW Entwicklungsbank has supported the build-up of microfinance institutions in 36 countries with 82 projects.  KfW Entwicklungsbank is one of the leading banks worldwide engaged in funding the microfinance sector, providing nearly EUR 400 million in financing.

The mission of IFC ( 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.  From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries.  IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.