The EBRD is providing a 5-year loan to Bank CenterCredit (BCC) to support the expansion and further development of micro, small and medium-sized enterprises (MSMEs) in Kazakhstan.
The distinctive feature of the deal is that the $50 million credit will be on-lent to local companies outside the major cities Almaty and Astana where access to finance remains difficult.
The MSME sector is an important provider of employment and is increasingly important for the Kazakh economy. The government sees the growth of small businesses as key to the sustainable development of an economy which is otherwise dominated by natural resources. The demand from local micro and small businesses for loans, especially longer term funding, is increasing.
It is here that the EBRD can play a vital role because through its credit lines to local banks like BCC the Bank facilitates access to finance at times when this is especially needed.
The EBRD loan will consist of two equal portions. The first portion will be for loans below $200,000, focused on the smallest businesses with an average loan size expected to be $10,000. The second portion will be used to finance loans worth the equivalent of $200,000 to $500,000, aimed at small and medium-sized enterprises.
The loan is supported by a $58,000 Technical Cooperation grant provided by the Grand Duchy of Luxembourg to improve the efficiency of small business lending.
Jean-Marc Peterschmitt, EBRD Director, Bank Relationships, said that the loan will support the development and expansion of BCC’s MSME business. He emphasised that the EBRD “stands ready to support the Kazakh economy especially at a time when this is more needed than ever.”
BCC believes that the loan will help to further promote its strong position and ensure its sustainable growth by increasing its market share in Kazakhstan. “The EBRD loan is also recognition of our bank as a stable financial institution with a strong reputation and well-defined policy”, BCC Chairman of the Management Board Vladislav Lee said. The financing is also a welcome signal of the EBRD’s confidence in Kazakhstan’s economy which is expected to encourage more foreign investments, he added.
Bank CenterCredit and the EBRD have been partners since 1997 when BCC joined the EBRD Kazakhstan Small Business Programme I.
Today, BCC is a universal bank focused on micro, small and medium sized enterprises as well as private individuals. It is the sixth largest commercial bank in Kazakhstan in terms of assets.
The EBRD is the largest single investor outside the oil and gas sector in Kazakhstan. To date the Bank has signed about 100 projects and invested some ˆ3.5 billion in the country. |
