Tashkent, Uzbekistan (UzDaily.com) -- The European Bank for Reconstruction and Development is supporting the availability of financing and non-banking services to private businesses in the Kyrgyz Republic with a US$3 million equivalent loan to Mol Bulak Finance for on-lending to micro and small enterprises (MSEs). The loan will be extended in Kyrgyz Som, in line with the EBRD’s focus on increasing local currency lending in its countries of operations.

The EBRD’s 3-year senior loan will be used to address the limited access to finance for entrepreneurs in Kyrgyzstan, especially in the country’s remote areas. It will help Mol Bulak Finance, one of the largest non-bank microfinance institutions serving around 30,000 customers, in expanding its lending portfolio and will increase the availability of local currency finance to MSEs.

“The Kyrgyz Republic has been at the forefront of the Bank’s efforts to work with non-bank microfinance institutions. Lending to private businesses stood the test of recent political unrest and helped in various sectors of the country’s economy. It is important to meet the needs of the smaller and poorer borrowers through geographic expansion of the loan portfolio. With the EBRD’s support Mol Bulak will become a stronger regional player with better outreach to micro entrepreneurs in remote areas of the Kyrgyz Republic,” said Kenji Nakazawa, Head of the EBRD Resident Office in Bishkek.

“Mol Bulak Finance is very pleased to continue our cooperation with the EBRD. We very much appreciate the Bank’s timely support. The EBRD is definitely a leader in providing funding and technical assistance to microfinance sector in the region. With other international investors being keen on recognising the EBRD’s opinion, hopefully, they will also be willing to make their investments in the Kyrgyz Republic at this challenging time. Thank you for having a faith in Mol Bulak Finance,” Babur Tolbaev, the CEO of Mol Bulak Finance said.

Since March 2005, Mol Bulak has developed into one of the largest non-banking financial intermediaries for low-income micro and small borrowers in the Kyrgyz Republic. The company specialises in providing lending services mainly through group lending methodology, which requires borrowers to form solidarity groups with each member guaranteeing loan repayments within the group. Mol Bulak has a strong focus on serving micro entrepreneurs across the country with nearly 80 per cent of the company’s clients operating outside of the capital Bishkek.

In the Kyrgyz Republic, the EBRD focuses its activities on supporting micro, small and medium-sized enterprises and developing key infrastructure projects. To date, the EBRD has committed about €250 million in various sectors of the Kyrgyz economy, mobilising additional investments of about €500 million in over 70 projects, with 63 per cent of the projects being investments into the development of the country’s private sector.