Azerbaijan, Baku, Dec. 22/ Trend V. Zhavoronkova/
The European Bank for Reconstruction and Development (EBRD) opened credit line in the amount of $4 million to First MicroFinance Bank of Tajikistan for on-lending in somoni (national currency) to small businesses, the organization reported.
The funds were allocated within the EBRD's support of small and medium-sized businesses in Tajikistan. The credit line will allow for diversification of the bank's funding base and provide more somoni loans to small businesses in Tajikistan.
First MicroFinance Bank (FMFB) is the first dedicated microfinance bank in Tajikistan. Its mission is to assist rural communities to develop small businesses. It has one of the broadest outreaches in rural areas and operates in the Rasht Valley and Gorno-Badakhshan Autonomous Oblast regions, parts of the country where the presence of other financial intermediaries is limited.
First MicroFinance Bank is the fourth financial institution in Tajikistan to have joined the EBRD's new Local Currency Lending Program in Early Transition Countries (ETC), as part of its drive to reduce the risks - exposed by the economic crisis - of depending excessively on foreign currency funding.
The program, launched in 2011 with the support of the U.S. and Swiss governments, the multi-donor ETC Fund and the EBRD Shareholder Special Fund.
It allows the EBRD to support private sector development by extending local currency-denominated loans to eligible banks, microfinance organizations and private enterprises, to help them avoid taking on exchange rate risks. Tajikistan was the first country to benefit from this new program in Central Asia.
To date, the EBRD has committed over $319 million in various sectors of the Tajik economy.
