The loan will be issued in two tranches. Aftab Ahmed, Director of IFC’s Global Financial Markets Department for Europe, Central Asia, the Middle East and North Africa and Olmahon Turajanova, Chairman of the Board of Hamkorbank signed the loan agreement on allocation of the first tranche on 29 November 2013.

The loan is allocated to help the bank to improve access to finance for micro and small enterprises in Uzbekistan, as well as create much-needed jobs and boosting the economy.

The investment is a part of efforts of the IFC in Uzbekistan to support development of private sector and stimulate economic growth through providing access to financing to further develop small businesses. The maximum size of the loan on one debtor is US$500,000.

During the signing ceremony, Aftab Ahmed said that it is important event for IFC and Hamkorbank. She said that the partnership between two sides started over 10 years ago. IFC decided to become shareholder of Hamkorbank, buying 15% stake in the bank. He said that the goal of the partnership is to assist economy of Uzbekistan to provide financial services to micro and small businesses.

He underlined that small and medium businesses are important component of any economy as they help to develop production sector and contribute to form the country’s GDP, as well as promote exports and create new jobs.

Since 2001, IFC has provided Hamkorbank in debt and equity finance. IFC has also provided the bank with advisory support that has helped the bank to develop prudent risk management practices, build capacity to finance agricultural investments, and develop a strong corporate governance system.

Aftab Ahmed noted that the IFC allocated about US$13 million in last 12 years to the Uzbek bank and the sum of the current credit line is US$15 million. He said that the second tranche will be issued within 12 months. The IFC official said that with one deal we provide financial resources, which exceeds the sum of financial resources, provided in 12 years.

“It is critical to meet the unfulfilled financing demand of small businesses in Uzbekistan, which are a key driver for economic growth and employment,” said Aftab Ahmed. “Long-term partnerships with local private banks allow us to channel much-needed finance to local small businesses in remote areas of the country, and promote best practices across the entire banking sector of Uzbekistan.”

Olmahon Turajanova said that the bank is proud of its cooperation with international financial institutions, including IFC. “We welcome IFC’s support and long-lasting cooperation in expanding access to finance in Uzbekistan,” said Olmahon Turajanova, “This is a sign of the bank’s solid strategy and its commitment to further economic growth.”

Uzbekistan became a member of IFC in 1993. Since 1996, IFC has invested $94 million to support 27 private sector projects in the financial, agribusiness, and food sectors.

IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges.