OREANDA-NEWS. May 12, 2009. The EBRD’s Board of Directors has approved a credit line of US20 million to ATF Bank-Kyrgyzstan, to support the Kyrgyz economy via credits to the country’s micro and small and medium-sized business sectors, reported the press-centre of EBRD.

The loans are part of the EBRD’s response to the global financial crisis, providing a flow of finance to the real economy in Kyrgyzstan at a time of scarce alternative commercial funding.

Subject to the conclusion of legal documentation, of the total, US 14 million would be provided for SME lending and US 6 million for lending to the micro sector. US 5 million of the overall credit line would be made available in Kyrgyz soms, the local currency. ATF is part of the UniCredit group.

“This is an important contribution to the Kyrgyz economy during the crisis when exports are falling and there are few remittances to help fund private consumption,” said Kenji Nakazawa, the EBRD’s Head of Office in the Kyrgyz Republic.

"The SME is one of the main priorities of ATF Bank's activity. In these difficult market circumstances the support of EBRD is very timely for the country's economy. I am very pleased to see that our long-term partnership with the EBRD has been strengthened even further", said Alexander Picker, CEO of ATF Bank.

Both credits are part of a joint initiative with the UniCredit group to continue investing in eastern Europe and central Asia and so keep funding open to the real economy.

The EBRD is making investments worth a total of EUR432.4 million in UniCredit subsidiaries across eight eastern European countries, as part of a joint effort to tackle the impact of the global economic crisis on the region. The aim is to provide medium and long-term debt and equtiy financing through UniCredit subsidiaries in support of SMEs, lease finance and energy efficiency projects.

UniCredit is the largest banking group in the central and eastern European region, with over 4,000 branches in 19 countries. The group has invested around EUR 10 billion of equity in central and eastern Europe and has around EUR 85 billion of total customers loans in the region. Beside its own funding programs to its subsidiaries, it cooperates with international institutions including the EBRD in order to ensure continuing support to the local economies during those challenging times.

The EBRD investment is part of the joint pledge by the EBRD, the World Bank Group and the European Investment Bank (EIB) to provide over EUR 24 billion in support of the banking sectors in the region and to fund lending to businesses hit by the global crisis.

The International Financial Institutions (IFIs) are working with key banking groups active in eastern Europe to deliver a rapid response to the financing requirements of individual subsidiaries and complementing the funding plans of the parents. This project with UniCredit is expected to be followed by combined investments in the eastern subsidiaries of other banking groups.

In response to the crisis, the EBRD has increased its planned investments in the financial sector by 50 percent to EUR3 billion this year. It has also announced a doubling of its funding to support important cross border commerce via its Trade Facilitation Programme.

In the first quarter of this year, the EBRD had made investments of EUR 1.1 billion, a rise of 64 percent from the same period in 2008. Total investments of EUR 7 billion are expected this year, up over 30 percent from 2008.