News

First investment FMO in Tajikistan

Last week, FMO disbursed a USD 4 mln loan to Bank Eskhata in Tajikistan. This is FMO’s first investment in Tajikistan, a lower-middle class income country in Central Asia. FMO signed a participation agreement with EBRD to jointly invest USD 6 mln in Bank Eskhata. EBRD will invest USD 2 mln, FMO will start with USD 4 mln and later on invest another 1,2 mln in this bank through EBRD’s Trade Facilitation Programme.

Tajikistan, which became independent in 1991, has one of the lowest per capita GDPs among the 15 former Soviet republics. Although the country has experienced steady economic growth since 1997, two-thirds of the population still lives in abject poverty. Currently, there are several commercial banks in Tajikistan, which form the whole Tajik banking sector but they need to further develop. Therefore, services and products offered by FMO, EBRD and similar institutions play a pivotal role for the sector. By participating in this transaction FMO shows its commitment to develop and substantially increase the Tajik private financial sector. Additionally FMO plans to provide funding from its Capacity Development Fund to Bank Eskhata and other Tajik Banks. 

Bank Eskhata is a relatively small commercial bank in Tajikistan which offers a wide range of services to micro, small and medium sized businesses and retail products to individuals. The facilities will enable Bank Eskhata to access commercial markets and expand access to finance for micro and small sized enterprises in the poorest part of Tajikistan as the bank’s main operation is in the north of the country, where also financial intermediation is the lowest. Bank Eskhata has EBRD (21%) and ShoreCap (21%) as international shareholders.