DealsBrief
ADB lends Bank Respublika $40 million for regional firms and farms
At least half goes to agricultural borrowers and a fifth to women-owned small firms outside Baku, through Azerbaijan's fifth-largest bank by assets.
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The Asian Development Bank and Bank Respublika have signed a $40 million loan to fund small businesses and farm borrowers in the regions outside Azerbaijan's capital, the multilateral lender said in Baku on 26 October.
At least 20 per cent of the proceeds will be on-lent to women-owned micro, small and medium-sized enterprises, and at least 50 per cent to borrowers in agricultural production, processing and trade, including for drip irrigation and for crops and fruit adapted to diverse weather conditions, the bank said. It said banking services remain concentrated in Baku, which leaves regional firms and small farms short of credit.
Bank Respublika, established in 1992, is Azerbaijan's fifth-largest bank by assets, with a 4.4 per cent market share and 40 branches, 24 of them outside Baku, according to the release. The lender's country director for Azerbaijan, Sunniya Durrani-Jamal, and the bank's chief executive, Tariyel Ismayilov, attended the signing ceremony in Baku.
The loan was approved on 26 June and comes from ordinary capital resources, the project data sheet shows. The sheet notes that micro, small and medium-sized enterprises account for 99.7 per cent of all enterprises in Azerbaijan, 43 per cent of them in rural areas, and that farm loans make up the bulk of the bank's rural business book. It puts poverty incidence in Azerbaijan at 5 per cent in 2021, with rural areas accounting for 60 per cent of the poor, and classes the project as one with poverty reduction and inclusion elements.
Durrani-Jamal said the project "builds on ADB's ongoing engagement with Bank Respublika". Ismayilov, who chairs the bank's management board, said supporting entrepreneurship across the regions is one of the bank's strategic priorities, and that the agreement will let it expand lending to small and medium-sized businesses, particularly in agriculture, modern farm technology and women's entrepreneurship, Trend reported. He called it a source of long-term funding. Neither the lender nor the bank gives the loan's tenor or pricing.
The signing follows the lender's approval of a $302 million loan for Baku Metro's signalling. Azerbaijan's central bank has also amended three credit-risk regulations that take effect on 9 November.