The FINANCIAL — The Asian Development Bank (ADB) has approved a $10 million loan to help Bai Tushum Bank (BTB) provide critically needed medium- and long-term funding to micro, small and medium-sized enterprises (MSMEs) in the Kyrgyz Republic.
The loan assistance will be complemented by capacity development technical assistance for BTB to develop mobile banking products, and run financial literacy training in rural areas, according to ADB.
The National Bank of the Kyrgyz Republic currently estimates the unbanked population in the country at 80%. The country’s low level of financial sector development limits MSMEs’ access to credit.
”MSMEs are key contributors to poverty reduction by increasing individual incomes and creating employment,” said Monisha Hermans, Investment Specialist with ADB’s Private Sector Operations Department. “The provision of medium and long-term financing is essential for MSMEs to expand and reach higher levels of productivity and competitiveness.”
The ADB loan and technical assistance will allow BTB to build its capacity to improve its deposit mobilization and outreach to remote villages and farmers, thus promoting inclusiveness, as well as strengthen the bank’s outreach to female entrepreneurs, and support gender equality policies within the financial institution.
BTB was established as a local microfinance institution (MFI) in 2000, and in 2012 became the first MFI in the Kyrgyz Republic 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.
The loan was approved under the new FAST framework which enhances ADB’s ability to undertake smaller nonsovereign transactions through a streamlined approval procedure.
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.
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