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- OPEC Fund loan to Ipoteka Bank will support SMEs and private sector development in Uzbekistan
OPEC Fund loan to Ipoteka Bank will support SMEs and private sector development in Uzbekistan
Photo: Michal Knitl _ Shutterstock.com
June 1, 2021: The OPEC Fund for International Development (OPEC Fund) has signed a US$30 million private sector loan agreement with the Joint Stock Commercial Mortgage Bank (JSCMB “Ipoteka Bank”), Uzbekistan. The loan will be used for on-lending to small- and medium-sized enterprises (SMEs) in Uzbekistan and support the bank’s pre-privatization efforts to shift to a more commercially viable and competitive business model.
SMEs play an integral role in Uzbekistan, Central Asia’s most populous state, employing close to 80 percent of the country’s workforce. JSCMB “Ipoteka Bank” – the fourth largest bank in Uzbekistan - is focusing its strategy on growing its SME portfolio, leveraging on its SME client base of over 83,000 customers, of which 7,000 are existing borrowers. The OPEC Fund’s loan will assist the Bank in financing small and medium size businesses in sectors such as agriculture, healthcare, construction and textiles – particularly cotton - a major export product of Uzbekistan.
In 2020, Uzbekistan announced a new financial sector policy and reforms to gradually convert the country’s state-owned banks towards a more private and competitive business model with the support of international finance institutions. OPEC Fund’s loan is in line with this strategy and will help to further commercialize the bank’s operations and enhance its competitiveness.
“This agreement between Ipoteka Bank and the OPEC Fund will provide more support to small and medium-sized businesses in our country and help with creation of new job places through the further development of small and medium-sized entrepreneurship in various sectors of economy” said Elyor Inomjonov, Chairman of the Management Board of JSCMB Ipoteka Bank.
OPEC Fund Director-General Dr. Abdulhamid Alkhalifa said: “We are pleased to work with Ipoteka Bank to support Uzbekistan’s micro, small and medium-sized enterprises. Making up nearly 80 percent of the country’s workforce, they are particularly significant for post COVID-19 recovery. Our loan will also contribute to greater efficiency and competitiveness of the bank and further expand its lending to SMEs.”
The OPEC Fund and Uzbekistan have been development partners for more than two decades. The organization has to date committed funding to various sectors including banking, energy, agriculture, transportation and education.
About the OPEC Fund
The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established by the member countries of OPEC in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare and education. To date, the OPEC Fund has committed more than US$22 billion to development projects in over 125 countries with an estimated total project cost of US$187 billion. Our vision is a world where sustainable development is a reality for all.
About JSCMB “Ipoteka Bank”
JSCMB “Ipoteka Bank” is a financial institution with extensive experience in the mortgage lending and trade finance. In addition, JS?MB “Ipoteka Bank” is considered to be a large and universal bank that provides a wide range banking services through a well-developed network of 39 branches, due to which it has geographical coverage throughout Uzbekistan.