Micro, small and medium-sized enterprises (MSMEs) in Azerbaijan will benefit from greater access to finance as the European Bank for Reconstruction and Development (EBRD) is providing financing, in Azerbaijani manat, equivalent to up to US$ 13.5 million, to Bank Respublika, a key local lender.
➖Bank Respublika to finance smaller businesses in rural areas and attract new clients
➖New financing sees EBRD doubling support for Azerbaijan’s banking sector
The first credit line, in the local currency equivalent of up to US$ 9.5 million, will be provided under the Azerbaijan Agricultural Finance Facility (AZAFF) and on-lent to agricultural businesses. AZAFF, supported by EU funds, aims to step up financing for the country’s agricultural sector, boosting its development.
The other credit line, worth up to US$ 4 million, in local currency equivalent, will be on-lent to MSMEs across the country. Both facilities will be extended in two equal tranches.
Bank Respublika is planning to direct most of the EBRD financing to companies outside large cities and to new clients, which are particularly hit by the COVID-19.
The two facilities will effectively double the EBRD’s support to Azerbaijan’s banking sector, compared US$ 6 million provided in 2019 and in 2020. Expanding access to finance for local businesses by encouraging bank lending is among the EBRD’s priorities in the country.
Catarina Bjorlin Hansen, EBRD Regional Director for the Caucasus, said: “I am pleased that the EBRD is able to expand access to finance for Azerbaijani businesses by strengthening cooperation with Bank Respublika. Our goal is to encourage bank lending and help produce an impact on firm growth, productivity and employment.”
The Bank is a leading institutional investor in Azerbaijan and has so far invested close to €3.2 billion in almost 180 projects across various sectors of the economy. The Bank’s strategy in the country focuses on efforts to help Azerbaijan diversify the economy and develop the private sector in non-oil sectors.