DUSHANBE, December 4, Asia-Plus - The International Finance Corporation, the private sector arm of the World Bank Group, is supporting the growth of smaller businesses in Tajikistan with a new $2.5 million credit line to a leading local financial institution, TojikSodirotBonk (TSB). The loan will allow the bank to expand its lending to micro and small enterprises, a key force for job creation and poverty reduction in this country of the Central Asia Region.

IFC and TojikSodirotBonk signed an agreement for IFC to provide the credit line to TojikSodirotBonk in Dushanbe on December 4.

The project is part of IFC’s $45 million Central Asia Micro and Small Enterprises Facility, which makes loans to selected local banks for on-lending to micro and small enterprises in Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan in cooperation with the European Bank for Reconstruction and Development. The financing of TSB strengthens private sector development in Tajikistan in two ways: it supports smaller businesses that often have difficulty obtaining access to capital and strengthens a key private financial institution.

TSB joined the Tajikistan Micro and Small Enterprise Finance Program in November 2003, which is managed by LFS Financial Systems GmbH, financed by EBRD’s Early Transition Fund.

TojikSodirotBonk today, being one of the largest banks in the country with 9 branches across the country and a wide client base of private enterprises in the trade, services, and industry sectors, plays an important role in private sector development in Tajikistan.

Izatullo Lalbekov, Chairman of Management Board of TojikSodirotBonk said, “Cooperation with such global financial institutions as IFC, EBRD and ADB is very important to us and lays much responsibility on us in terms of both raising efficiency of the Bank’s operations and introducing cutting edge lending mechanisms and practices.  IFC’s contribution to the development of entrepreneurship in our country is, beyond doubt, crucial.  We have all the grounds to assume that Tajikistan’s economy, based on private sector, is growing steadily, with credit support being an important instrument both for private sector development and improving people’s lives. I think that an important aspect of further cooperation should be extension of  leasing operations to renew productive facilities, introduce new technologies, resulting in an increase in production capacity and job creation.”

“The support of sound financial intermediaries is a key pillar in IFC’s Tajikistan strategy. We are pleased to begin what we hope will be a long-term and expanding relationship with TSB in order to have a significant development impact in the country’s micro, small, and medium enterprise sector,” said Shahbaz Mavaddat, IFC''s Director for Southern  Europe and Central Asia.

IFC, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries.  IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. 

Founded in December 1990 as the Tajik branch of the Vnesh Econom Bank of the former Soviet Union, TojikSodirotBonk 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 covering 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.