Private Sector Development 2 Project

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The Second Private Sector Development Project is a follow-up to the first private sector development (PSD 1) project. Its principal objectives are to: a) promote private sector growth and create conditions for an effective supply response from viable private enterprises and farmers; b) facilitate the banking sector transformation and integration into international financial markets; and c) stimulate credit market competition. At the level of individual banks, the project aims to provide hands-on-assistance for institutional strengthening and the adoption of safe and sound banking practices. The project will contribute to reversing the country's economy decline and to increase the private sector share in the economy. The project consists of a single private enterprise finance component, consisting of a credit line to be intermediated by a number of participating financial intermediaries (PFI). Six PFIs have been already qualified under the PSD 1 and an additional three banks are expected to be able to meet qualification criteria in the near future. The subloans under the credit line will be extended for investment and working capital finance of eligible private enterprises for eligible subprojects.