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EBRD makes first equity investment in Tajikistan's banking sector
The European Bank for Reconstruction and Development (EBRD) is supporting Tajikistan’s financial sector through an equity investment of up to US$ 500,000 in the State Joint Stock Commercial Bank for Foreign Economic Activity – Tojiksodirotbank (TSOB). The subscription to newly issued registered shares of TSOB is the EBRD’s first equity investment in the country’s banking sector. The shares will represent up to 19.5 per cent of TSOB’s paid-in capital and voting rights.
"Sound and efficient financial institutions are vital for the development of a healthy market economy," said Kurt Geiger, Director of the EBRD’s Financial Institutions Team. "By supporting TSOB, the EBRD will assist Tajikistan in strengthening its financial sector, contributing to the establishment of a sound private banking system in order to support the real economy."
The proceeds of the EBRD’s investment will be used by TSOB to strengthen its capital base, to increase available funding for small and medium-sized enterprises (SMEs) and to mobilise co-investments in TSOB's capital of approximately US$ 1.4 million. The project will improve standards of corporate governance and business conduct and will encourage the development of a competitive financial market that can attract foreign investment and meet the needs of the SME sector.
The EBRD’s equity investment in TSOB is part of a joint initiative between the EBRD, the International Monetary Fund (IMF) and the World Bank Group that is designed to support Tajikistan's efforts to restructure and strengthen its banking sector.
TSOB started operations in 1992 as a joint-stock Commercial Bank for Foreign Economic Activity, and operated as a branch of the Soviet Vnesheconombank, specialising in transactions involving trade with foreign customers. Following the break-up of the Soviet Union, the Tajik branch of the Soviet Vnesheconombank was reorganised and TSOB became its legal successor.
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