The European Bank for Reconstruction and Development (EBRD) has arranged a US$ 10 million financing package for Bai Tushum Bank (BTB), one of its partner banks in the Kyrgyz Republic. For the first time, the German development finance institution, DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH – is providing lending to Bai Tushum alongside the EBRD.
BTB will receive an EBRD loan in the local currency (som) equivalent of US$ 2 million. An additional US$ 8 million will be provided by DEG. The funds will be used for on-lending to micro, small and medium-sized enterprises (MSMEs) in the Kyrgyz Republic.
BTB has been operating in the micro lending market for over 14 years. It is a longstanding partner of the EBRD and the German KfW Group and has a particularly strong record in reaching out to small entrepreneurs throughout the country. It is the first microfinance company to successfully transform into a bank in Central Asia. Today BTB is one of the largest micro and small-business lenders in the Kyrgyz Republic, with 65 lending outlets.
“With this new loan, the ninth facility to Bai Tushum, the EBRD is responding to an increased demand for local currency funding from local MSMEs,” said Larisa Manastirli, Head of the EBRD’s Bishkek Resident Office, at the signing.
“We are pleased to be able to mobilise significant financing from DEG, thus helping our partner bank to diversify funding sources and bring more long-term resources to BTB clients,” said Muzaffar Zuhurov, Principal Banker in the EBRD Loan Syndications team.
Tilman Kruse, DEG Director for Eastern Europe and Central Asia, added: “DEG is proud to be providing its first loan to Bai Tushum Bank. Our funding will support the further development of small and medium-sized businesses in the Kyrgyz Republic and thus help to address a major constraint to economic growth.”
“Considering the severe shortage of local currency funding in the Kyrgyz Republic, we highly appreciate the EBRD’s support in providing us with medium-term funding in local currency,” said Gulnara Shamshieva, the General Manager of Bai Tushum Bank. “We are also pleased to enter into cooperation with DEG, a well-recognised institution in our region. This cooperation will help us build a sustainable and profitable business focused on MSMEs, strengthen our product line and grow sustainably.”
Since the beginning of its operations in the country, the EBRD has invested over US$ 592 million in the Kyrgyz Republic in 118 projects across many different sectors of the economy.
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