WASHINGTON, D.C., September 28, 1999
- The International Finance Corporation today signed agreements to provide
a US$25 million credit line that will bolster two banks in Uzbekistan as
well as provide a rare source of long-term financing for the fledgling
small business community.
IFC will extend loans of up to US$15 million to the National Bank of Uzbekistan
and up to US$10 million to Asaka Bank, the two financial intermediaries
for the credit line.
The two banks will, in turn, make sub-loans from US$50,000 to US$2 million
to small and medium enterprises in Uzbekistan to finance capital expenditures,
expansion, modernization, spare parts, training programs, and to provide
working capital. IFC's credit line will also strengthen the banks' ability
to undertake project finance, structuring, environmental review and supervision.
Mr. Jemal-ud-din Kassum, IFC Vice President for Investment Operations,
said that the project addresses the severe shortage of international financing
and this first credit line to Uzbek banks reflects IFC's commitment to
foster private sector development in Uzbekistan by assisting small and
medium enterprises, developing the financial sector, and enhancing the
business environment for private investment.
One of the major constraints for the development of small and medium private
enterprises in Uzbekistan is their limited access to financing. IFC's credit
line will make available long-term hard currency financing to these smaller
companies. At the same time, the credit line will help to develop the country's
financial sector by providing both funding and the technical skills for
the two banks to engage in project-based financing.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in the
developing world, mobilizes capital in the international financial markets,
and provides technical assistance and advice to governments and businesses.