DUSHANBE, April 3, 2012, Asia-Plus – International Finance Corporation (IFC) is providing a local currency loan equivalent to about US$5 million to IMON, the leading microfinance institution in Tajikistan, to increase access to finance for the country’s poorest and most vulnerable people, many of them women living in rural areas, press release issued by IFC Dushanbe Office said.
IFC’s loan linked to Tajik somoni will help IMON increase its reach to micro and small entrepreneurs, including women, in rural Tajikistan. This deal is IFC’s first local currency financing project in Tajikistan. Combined with IFC’s advisory work, the investment will also support IMON during its transformation into a full-fledged bank.
“Since local currency financing of long-term maturity is scarce in Tajikistan, domestic microfinance institutions are exposed to a foreign currency risk, which negatively affects the private development and economic growth of the country,” said Sanavbar Sharipova, IMON’s CEO. “IFC’s local currency funds will help IMON increase and diversify lending activities and expand the microfinance network.”
Limited access to finance, with low penetration of the microfinance and banking sectors, hinders economic development in Tajikistan. IFC advisors are helping microfinance institutions develop their management capacity, and IFC investment is helping them stabilize and diversify their funding base by extending long-term financing, thus fulfilling unmet demand for financial services.
“IFC wants to expand microfinance in Tajikistan to stimulate entrepreneurship and attract private capital to the financial sector,” said K. Aftab Ahmed, IFC Director for Financial Markets & Private Equity Funds for Europe, Central Asia, Middle East & North Africa. “IFC’s work with IMON will help improve access to finance for micro and small entrepreneurs in Tajikistan, many of whom are accessing the formal financial sector for the first time, and support IMON in its transformation into a full-fledged commercial bank.”
Since pioneering commercial microfinance in the early 1990s, IFC has continued to lead innovation in microfinance, using developments in technology, financial products, and policy to help financial institutions reach a greater number of people in a more cost-effective way. Rapid growth of the industry over the past 15 years has helped reach approximately 130 million clients.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, IFC helped its clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving its investments to an all-time high of nearly US$19 billion.
IMON International is the largest microfinance organization in Tajikistan, with seven branches and 33 field offices covering 28 districts of the country. IMON grew out of the Micro Loans in Tajikistan program started in 1999 by the National Association of Businesswomen of Tajikistan in partnership with Mercy Corps. In 2007, the founders decided to transform IMON from a nonprofit microfinance lending foundation into a commercial organization. In 2008, IFC provided a $2.5 million loan to support IMON’s lending operations and increase its outreach.