Turkmenistan SME Financing Programme

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The EBRD is considering credit lines to Joint Stock Commercial Bank Senagat (SB) and State Commercial Bank Turkmenbashy (TB) to support the development of the financial sector in Turkmenistan with the objective to strengthen its ability to provide commercially oriented financing to local private small and medium-sized enterprises (SMEs), which are operating in difficult environments and are deprived of long-term foreign currency funding. The amount of credit lines will be USD 2 million for SB and USD 3 million for TB. The project will encourage the participating banks to focus on SMEs whose financial demands are not fully met in current market conditions in the country and will also enhance the capacity of the banks to service SME clients. The financial sector in Turkmenistan is characterised by extremely low financial intermediation for the private sector, especially for SMEs. Through the accompanying Technical Assistance programme the project will also help the participating banks to establish and implement sustainable SME lending practices based on commercial principles, thus contributing to improved credit skills and operating efficiency of these banks in their lending to local private SMEs. Joint Stock Commercial Bank Senagat (SB) is the only bank in Turkmenistan with majority private ownership through a large number of private shareholders, mainly private entrepreneurs and SMEs. The bank focuses on private companies, especially SMEs, and individuals and its overall strategy is to retain its leading position as a SME bank in the country. State Commercial Bank Turkmenbashy (TB) is one of 5 large state owned banks and its main function is to finance industry and infrastructure projects under the government programme. In addition to this public sector role, the bank is also active in servicing private companies, individuals and joint venture companies and is one of the largest lenders to local private SMEs. Senior loans to SB in the amount of USD 2 million and to TB in the amount of USD 3 million. USD 5 million. The participating banks will be required to comply with EBRD’s Environmental Procedures for Small and Micro Loans, including ensuring compliance with the applicable national environmental, health, safety and labour standards and regulations, adherence with EBRD’s Environmental Exclusion and Referral Lists and submission of annual environmental reports to the Bank. The project will be supported by the Credit Advisor programme which will provide advisory and training services to the participating banks to ensure the quality of the sub-loans and establish sustainable SME lending practices. In addition, it will also contribute to the improvement of technical skills of the local banking community by providing training to staffs from other commercial banks and trainers from the local banking colleges. Kiyoshi Nishimura, Senior Banker, Financial Institutions Team, EBRD One Exchange Square, London EC2A 2JN Tel: +44(0)207 338 7409 Fax: +44(0)207 338 6119 Email: nishimuk@ebrd.com