OREANDA-NEWS. The EBRD is stepping up its efforts to support micro and small businesses in Azerbaijan with the provision of two loans to CredAgro and SOA Kredit, two leading microfinance institutions in the Caucasus, reported the press-centre of EBRD.

CredAgro, which is focused on agricultural and rural lending through its 20 branches across Azerbaijan, is receiving a $3 million loan to further expand its lending operations and create more opportunities for credit constrained rural borrowers in Azerbaijan.

Agriculture is the second largest sector of the Azeri economy, contributing 14 percent to GDP and employing about 40 percent of the population. This is the EBRD’s second loan to CredAgro following a $1 million loan provided by the Bank last year which was one of the first long term loans secured by CredAgro.

SOA Kredit, a niche operator in the provision of micro and small loans in Baku and Sumgait, is being provided with a $2 million loan for on-lending to micro and small enterprises to support the expansion of activities. SOA provides both small business loans as well as housing finance in Azerbaijan.

Varel Freeman, EBRD First Vice President, said the loans will stimulate the development and expansion of lending to small businesses which will support the diversification of Azerbaijan’s economy. Making more finance available to entrepreneurs in this dynamic sector will help them to maximise their potential and to expand within a rapidly growing economy. At the same time, the loans will support the creation of a healthy and competitive banking sector.

Both loans will be accompanied by Technical Cooperation funds to further improve operations, introduce new products and support the future transformation of CredAgro and SOA Kredit into commercial banks.

The finance comes under the EBRD’s Non-bank Microfinance Institutions Framework launched in 2005 to strengthen microfinance institutions in the Early Transition Countries Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, Mongolia, Tajikistan and Uzbekistan.

Through its micro and small enterprise programmes, the EBRD has supported over two million small enterprises throughout eastern Europe, Russia, central Asia and the Caucasus. Across its countries of operations, the EBRD has committed over ?899 million to 108 financial institutions to facilitate ?12 billion in 2,6 million loans to micro and small businesses in the region.