The FINANCIAL — The EBRD is providing Uzbek Leasing International with a $3 million loan to support small and medium-sized enterprises in the Central Asian republic who find access to finance still difficult.
At the same time the loan will allow the leasing company to better realise its growth potential which has been constrained by the lack of access to long-term financing.
Uzbek Leasing International was established in 1996 and the EBRD holds a 15 per cent stake in the company. Other shareholders of the company are Malayan Banking Berhad – Maybank (Malaysia), National Bank for Foreign Economic Activity of the Republic of Uzbekistan and International Finance Corporation.
Uzbek Leasing International is a good showcase of corporate governance in the local financial sector and specialises on middle-sized leasing transactions with an average transaction size of $300,000 which makes it attractive to SME clients. Its streamlined approval procedures give the company a competitive advantage in the Uzbek leasing sector which is still at the early stages of development.
Through financing leases to SME clients the loan will benefit the private sector where access to long-term financing for new equipment is not easy. The EBRD in Uzbekistan is focused on the development of the private sector, especially small and medium-sized companies, and the support of market reforms.
Fernand Pillonel, head of the EBRD office in Tashkent, said the loan to Uzbek Leasing International will have important impacts which go beyond one company: “A healthy leasing industry will assist in bringing increased flows of financing to the productive sector of the economy, thereby supporting the growth of domestic production. Supporting the local financial sector with funding is especially important now when the global financial markets are experiencing difficulties with liquidity”.
Zafar Mustafaev, CEO of Uzbek Leasing International, added: “The favourable business environment created in our country for leasing transactions is attracting more and more international investors to this sector. Signing the loan agreement with the EBRD today demonstrates how the shareholders of our company are committed to our on-going development even in the current tough financial markets conditions.”
Since its start of operations in 1991, the EBRD has invested about €550 million into more than 50 projects in Uzbekistan. In 2008 alone the Bank has signed local 6 projects (agribusiness, light industry and telecommunications) as well as 2 regional frameworks also benefiting Uzbekistan worth more than €30 million. The Bank will adopt a new strategy for Uzbekistan in 2009.
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