Press Releases

IFC and Tojiksodirotbonk to Develop Cotton Lending Products for Tajikistan’s Smaller Farms

In Moscow:
Ilya Sverdlov
Phone: +7495-411-7555, ext. 2075

In Dushanbe:
Stephen Lloyd Wright

Dushanbe, May 29, 2007—IFC, the private sector arm of the World Bank, and Tojiksodirotbonk the third-largest joint stock commercial bank in Tajikistan, signed a cooperation agreement last week to introduce new cotton lending products that will help southern Tajikistan’s smaller farms grow through better access to capital, while empowering women farmers.

IFC experts will work with Tojiksodirotbonk staff to introduce a cotton lending product on a commercially viable basis for small and midsize farmers in the Khatlon oblast.  Efforts also will include broadening the scope of the bank’s loan products to finance long-fibered cotton in Kurgan Tyube, and expanding the loan program beyond Kurgan Tyube. In addition to developing new financial products, the agreement involves training aimed at building internal bank capabilities to meet the needs of smaller farms. IFC will provide training on the specifics of lending to smaller farms, borrower supervision, and lending review. IFC and Tojiksodirotbonk will also develop a manual of cotton lending policies and procedures for local farmers.  A top priority is ensuring the integration of women farm workers -- who represent as high as 80 percent of farm employees on some of the Dekan farms -- into all project activities.

At the signing, Dr. Abdouakhad Ashourov, Chairman of Tojiksodirotbonk’s board, said, “There is strong market demand and government support for such lending products.  By combining our regional expertise in lending to larger farms with IFC’s expertise in developing financial products for small businesses, we can create a quality cotton lending product dedicated specifically to the growth of Tajikistan’s smaller farms. ”

The agricultural sector, and cotton production in particular, remains the largest employer in southern Tajikistan and a critical part of the country’s economy.  But industry development is hindered by outdated agribusiness management skills, poor sector organization, and limited access to finance. The new project will address these gaps to enhance sector development as a whole, while providing strong benefits for individual farm-based businesses.

Shahbaz Mavaddat, IFC Director for Southern Europe and Central Asia, said, “I am very pleased that IFC is supporting Tojiksodirotbonk’s efforts to expand its lending operations to the cotton sector in southern Tajikistan. This cooperation agreement builds upon IFC’s ongoing work to support the country’s financial and agricultural sectors.”

The project is part of the IFC Southern Tajikistan Cotton Lending Program and is supported by the Government of Canada through the Canadian International Development Agency.

About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries.  IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more
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About Tojiksodirotbonk
TSB was established in December 1990 as the Tajik branch of the Vnesh Econom Bank of the former Soviet Union, and it initially specialized in trade and import-export banking.  Later this branch was reorganized into a Joint-Stock Commercial Bank, “Tajikvnesheconombank”. In June 1999 the bank was renamed and registered as Tojiksodirotbonk or TSB. Headquartered in Dushanbe, TSB has 9 branches in the main cities of Tajikistan and covers all regions of the country. Its clients include the biggest Tajik trading companies, other enterprises, entrepreneurs, and some of the embassies and diplomatic organizations based in Dushanbe.