The FINANCIAL — The Asian Development Bank (ADB) and Bai Tushum Bank (BTB) have signed an agreement for a $10 million loan to help boost micro, small and medium-sized enterprises (MSMEs).
“The loan, along with technical assistance to develop mobile banking products, will give a significant lift to this vital sector of the economy,” said Monisha Hermans, Investment Specialist in ADB’s Private Sector Operations Department. “Opening up new opportunities for small businesses in isolated communities to access financial services is especially critical, and mobile phones offer a new way forward.”
In the Kyrgyz Republic, two-thirds of the population lives in rural areas, where the population density is only 27 inhabitants per square kilometer, and most people do not have access to bank services or formal bank accounts. At the same time, the mobile phone network covers the whole country, with most households having access to a mobile phone.
The assistance to BTB will allow it to provide finance to MSMEs and to develop financial services via mobile phone that can reach remote communities, accordng to ADB.
“This cooperation will contribute to further penetration of financial services into rural areas and the use of mobile banking will enable the reduction of financial costs, which has special importance for micro, small and medium-sized enterprises today,” said Gulnara Shamshieva, General Manager of BTB.
BTB was established as a local microfinance institution (MFI) in 2000, and in 2012 became the first MFI in the country to obtain a banking license. In terms of market share, as of December 2014, BTB ranks sixth for total loans and eighth for total assets. BTB currently serves 32,000 clients and provides a diverse range of financial services to entrepreneurs, small corporations and MSMEs, which represent 40% of its portfolio.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.