The European Bank for Reconstruction and Development (EBRD) is providing AccessBank with a $10m equivalent local currency credit line aimed to further increase the availability of financing to micro and small enterprises (MSEs) in Azerbaijan.
Under the synthetic loan, provided in Azeri Manat (AZN), the EBRD is providing the financing in US dollars, while AccessBank’s loan obligation is the AZN value of the provided funds.
The synthetic loan helps the institution to manage its foreign exchange risk, to increase the term of its local currency funding, and to expand its portfolio of AZN loans, particularly needed in rural areas of the country.
The proceeds of the credit line will be used to finance investments and working capital of local businesses with medium and long-term loans. Additionally, a part of the loan will be used to increase lending to women entrepreneurs in Azerbaijan.
Commenting on the financing, Dr. Andrew Pospielovsky, General Manager of AccessBank, was reported as saying: “This AZN loan will allow AccessBank to provide more loans to Azerbaijani businesses in the local currency. Consequently, it will remove currency risk and provide further assurance to our customers because their monthly instalments will be in the national currency and will not depend on currency fluctuations. This is excellent news for the Azeri business community”.
Founded in 2002 by the EBRD, KfW Development Bank, International Finance Corporation and Black Sea Trade and Development Bank, AccessBank is currently the leading provider of financial services to micro, small and medium-sized businesses in the country. To date the EBRD, which holds a 20% stake in AccessBank, has supported the institution through three facilities worth a total of $43m, which includes a syndicated loan of $28m.
FinSMEs
10/12/2009