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EBRD increases capital of Tajik Eskhata Bank
The European Bank for Reconstruction and Development is taking a $900,000
stake in Tajikistan’s Eskhata Bank, a privately owned bank with headquarters
in the northern city of Khujand which has become a leading regional player.
The EBRD is also lending Eskhata $2.5 million for on-lending to clients from
micro and small enterprises.
Taking equity in Eskhata will allow the bank to continue to comply with the
National Bank of Tajikistan’s minimum capital requirements, which have been
revised upwards to $5 million. The EBRD’s equity investment will help finance
Eskhata’s branch expansion and will stimulate offering of much-needed lending
products. ShoreCap International, a Chicago-based private equity fund seeking
to invest in minority positions in locally managed microfinance banks
operating in transition economies, will invest the same amount alongside the
EBRD.
Bank Eskhata was the first to participate in the EBRD’s $7 million Tajik Micro
and Small Enterprise Finance Facility (TMSEF) programme, now in its third
year. The Tajik bank received a $1 million credit line from the EBRD in
February 2004. The additional $2.5 million loan will further expand available
financing to Eskhata’s small business clients.
By October 2005, nearly 2,700 such loans for more than $8 million had been
disbursed by Eskhata in 6 different locations. The loans enable the smallest
entrepreneurs – more than half of them women – to expand their businesses. In
October alone, a total of over 180 loans, worth almost $0.6 million, were
disbursed by 28 loan officers trained as part of the programme.
Technical assistance funds by Britain’s DFID, USAID, the European Union and
the EBRD multi-donor Early Transition Country Fund, as well as co-financing
from the International Finance Corporation (IFC) and the Swiss SECO, have
supported Eskhata in training loan officers, setting up new small business
lending units, improving loan portfolio quality, and increasing efficiency to
provide small businesses with swift and adequate access to finance. Providing
access to finance to the private sector and reinforcing the banking sector are
two key priorities of the EBRD’s recently adopted country strategy for
Tajikistan.
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