Asaka Bank II

completed

The project''s principal purpose is to address the scarcity of term finance available in Uzbekistan, especially to the small and medium enterprises (SMEs) and Asaka has proven to be an efficient conduit bank with a strong pipeline of potential projects.The project''s developmental impact will be considerable in terms of its economic impact, stimulus for business growth, employment generation, and confidence building in the banking sector:The main developmental benefits will be at the enterprise level: they will come through business growth and the transfer of expertise and technology which will increase productivity. In addition, SME development will foster entrepreneurship, develop much needed managerial/financial skills, and increase employment and contribute to higher standards of living.The financial intermediation through the banking sector to SMEs will result in private sector development as well as institutional building for the financial sector. This will alleviate the severe shortage of long-term foreign currency financing to private SMEs by availing these credit facilities to financial intermediaries. By bringing additional resources into the banking system, the project will boost domestic investment and stimulate economic growth.One of the major constraints for SME development in Uzbekistan is their limited access to financing. IFC’s role is to make available long-term hard currency financing to SMEs during this transitional phase of the Uzbek economy. IFC''s strategy for Uzbekistan focuses on helping reduce poverty through accelerated growth and one of the key tools of this strategy is to provide "support to sectors such as SMEs which are particularly disadvantaged in the present economic environment in Uzbekistan." Through this second credit line to Asaka Bank, IFC will continue to play a strong role in making available this much-needed form of financial intermediation to SMEs in Uzbekistan.