OREANDA-NEWS. December 11, 2007. Stepping up its activities in the Kyrgyz Republic, the EBRD is providing a $4 million loan to support micro and small businesses, especially in remote areas where access to finance remains a key challenge, reported the press-centre of EBRD.

The credit will go to Kazkommertsbank Kyrgyzstan, a Kyrgyz subsidiary of Kazakhstan’s largest private bank Kazkommertsbank, and on-lent either in local currency or US dollars.

The provision of micro and small loans ranging from as little as $50 to $200,000 will extend the reach of the financial sector, attracting new customers across a greater number of Kyrgyz regions.

Kenji Nakazawa, head of the EBRD’s Resident Office in Bishkek, said that the loan was an important step in broadening the Bank’s activities in the Kyrgyz Republic. “There is much more we can do”, he added. “In the next year alone we intend to double our investment in the country from around $16 million in 2007 and introduce new financial instruments to support the development of the local banking sector.”

The EBRD’s loan comes under the $30 million Kyrgyz Micro and Small Enterprise Finance Facility II (KMSEFF II), which is specifically targeting economically less developed and agricultural regions. Lending to micro and small enterprises has become crucial for the development of the Kyrgyz economy. By end-September 2007, EBRD partner banks under the programme have provided more than 100,000 loans worth almost $295 million. Most clients are small traders who have never had access to formal finance, and the average loan size is about $3,500. The programme includes training schemes under which almost 850 local bank staff attended specialised courses.

KMSEF II is supported by Taiwan ICDF, the International Finance Corporation (IFC) and Switzerland’s State Secretariat for Economic Affairs (SECO). Technical cooperation funding has been provided by the EBRD’s multi-donor ETC Fund, the EU and the US Agency for International Development (USAID).