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EBRD expands microfinance in Azerbaijan
Loans to CredAgro to benefit rural areas and small businesses
The EBRD is expanding its support for microfinance in Azerbaijan and extending
a $1 million loan to the local microfinance institution CredAgro. $250.000 of
the $1 million is being funded by TaiwanICDF. The loan is provided under the
Non-bank Microfinance Institutions Framework for Early Transition Countries
launched in 2005.
CredAgro, set up in 2000, is a microfinance institution with a strong focus on
agricultural and rural lending. Although Azerbaijan in recent years has
strongly benefited from oil and oil-related business, agriculture remains the
country’s second largest economic sector, contributing 14 per cent to the
country’s GDP and providing employment to 40 per cent of the population.
The EBRD loan is set to facilitate access to finance for this vital sector of
the economy as the funds will be on-lent to rural entrepreneurs. This will
also allow CredAgro to expand its loan portfolio, product range and regional
network. The institution’s long term aim is the transformation into a bank
which will allow it to take deposits.
Chikako Kuno, EBRD Director for Small Business, said the loan will support
both the development of micro and small enterprises in Azerbaijan and of the
country’s banking sector. Of particular importance is the extension of
financing to rural areas and entrepreneurs which is a key objective of
CredAgro and also the EBRD.
The EBRD’s Non-bank Microfinance Institutions Framework for Early Transition
Countries aims at strengthening microfinance institutions in the Bank’s eight
poorest countries of operations. Loans are provided for on-lending to the
smallest borrowers across the ETC countries Armenia, Azerbaijan, Georgia, the
Kyrgyz Republic, Moldova, Mongolia, Tajikistan and Uzbekistan. The facility is
accompanied by a technical cooperation framework funded by donor governments.
Through its micro and small enterprises programmes the EBRD has supported over
one million small enterprises throughout eastern Europe, Russia, Central Asia
and the Caucasus. The EBRD has worked with 84 commercial banks and non-bank
microfinance institutions to establish or expand specialised micro and small
business finance units and has lent €560 million to facilitate close to €8
billion in loans to micro and small businesses in the region.
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