To spur private sector growth and support micro, small, and medium enterprises (MSMEs), including those owned by women, IFC signed a new loan with Hamkorbank, Uzbekistan’s largest private lender.
IFC will provide a $15 million loan to the bank, helping it expand its lending to MSMEs, with a quarter of the financing earmarked for women-owned businesses. This is IFC’s second project in Uzbekistan under its Banking on Women (BOW) program, which has been providing financial and business solutions to women-led enterprises through financial institution partners. To date, the BOW program has mobilized and invested US$3.3 billion in financial institutions globally, specifically to finance women-led small and medium enterprises (SMEs).
The Women Entrepreneurs Opportunity Facility (WEOF) and the Women Entrepreneurs Finance Initiative (We-Fi) will provide additional blended finance support in the form of performance-based incentives to support Hamkorbank in providing women-owned businesses access to finance. WEOF is an initiative launched by IFC—in partnership with the Goldman Sachs Foundation—to help expand access to capital for women entrepreneurs in developing countries and demonstrate the commercial viability of investing in women.
“We need to empower female entrepreneurs through access to capital in order to facilitate their growth, particularly given the impact of COVID-19.”, said Charlotte Keenan, Global Director of Goldman Sachs 10,000 Women. “We are pleased to support Hamkorbank as it expands lending to women-owned businesses in Uzbekistan.”
Despite MSMEs making up 92 percent of the enterprises in Uzbekistan and providing 75 percent of jobs, many face challenges in accessing finance. According to the MSME Finance Gap Database, the MSME financing gap in Uzbekistan is about $11.8 billion, equivalent to 18 percent of the country’s gross domestic product.
“The transaction is very important for Hamkorbank as it will expand our existing MSME banking franchise, while supporting women-owned businesses, which play an important role in Uzbekistan’s economy,” said Ikram Ibragimov, Chairman of the Supervisory Board of Hamkorbank. “We are delighted to be the first bank in Uzbekistan receiving access to IFC’s Banking on Women program’s financial and advisory solutions.”
IFC will leverage its global expertise through the Banking on Women program to help Hamkorbank develop a strategy, targeted products, and marketing tools to increase its gender finance portfolio. The project is in line with IFC’s country strategy for Uzbekistan, which focuses on expanding access to finance for MSMEs and women.
Cassandra Colbert, IFC Senior Manager, Central Asia, said, “By focusing on MSMEs and female entrepreneurs, IFC hopes to reduce the gap in financing for these two segments, where we see significant opportunities, promote private sector growth, and contribute to economic development in Uzbekistan.”