IFC is providing a financing package to one of Uzbekistan’s leading banks to boost access to finance for the country’s thousands of micro, small and medium enterprises (MSMEs) and narrow the financing gap, especially for women entrepreneurs.

IFC’s $20 million financing package to Ipoteka-Bank will be disbursed in Uzbek soums. A quarter of the financing will be earmarked for women-owned businesses as part of IFC's Banking on Women Program. In addition, the Women Entrepreneurs Finance Initiative (We-Fi) is providing performance-based incentives of up to $160,000 to help the bank boost access to finance for women-owned businesses.

The new loan builds upon IFC’s original $35 million pre-privatization transaction with the bank in 2020 and preceding advisory engagement.

"IFC's long-term financing and ongoing advisory services give us the foundation and support we need to transform into a commercially-run institution with improved profitability and a focus on SMEs, including women-led businesses. With IFC’s support, Ipoteka-Bank has already enhanced its SME banking capability, which is reflected in our SME portfolio more than tripling over the past couple of years,” said Elyor Inomjonov, Chairman of Ipoteka-Bank’s management board.  

Smaller businesses comprise close to 90 percent of all businesses in Uzbekistan, providing nearly three-quarters of all jobs and almost 55 percent of the country’s GDP in 2021. However, many have unmet financing needs, with the gap estimated at $10.2 billion. Women-owned SMEs—nearly a quarter of all businesses—have a financing gap of around $1 billion (MSME Finance Gap Database).

The financing also reflects IFC’s strategic goal of supporting Uzbekistan’s privatization program and helping drive private investments into the country’s banking sector, where the number of state-owned banks is still high.

“Smaller businesses are the engine of economic growth, but still struggle to access the support they need to grow and create jobs,” said Cassandra Colbert, IFC Senior Manager, Central Asia. “Our cooperation with Ipoteka-Bank will not only help address that issue but also help the bank continue its move towards greater private ownership, creating opportunities for investors and setting an example for other local banks.”

IFC has been working to transform Ipoteka-Bank since 2017 by enhancing its commercial operations, corporate governance, and risk-management practices, paving the way for this investment.