Strengthening its support for the private sector in Uzbekistan, the European Bank for Reconstruction and Development (EBRD) is providing a synthetic local currency loan of up to US$ 5 million to DAVR Bank.  This is reportedly the first EBRD loan to the bank aimed at expanding access to finance for local micro, small and medium-sized enterprises (MSMEs).

According to press release issued by EBRD, the loan agreement was signed in Tashkent on August 1 during a visit by EBRD President Suma Chakrabarti, who said: “Following a new stage of our engagement with Uzbekistan, our Bank has identified several key areas and SME funding is one of them. Today’s signing shows our firm commitment to provide further support to this significant sector of the country’s economy”.

The EBRD loan will allow DAVR bank, a privately owned financial institution in Uzbekistan established in  2001, to further develop its small-business lending practices, expand its client base and offer loans with longer maturities to firms around the country.

DAVR Bank will receive technical assistance under the Financial Institutions Development Programme in Uzbekistan to strengthen its institutional capacity through the development of SME lending practices and the improvement of risk management.

Between 1992 and 2010, the EBRD invested €894 million in Uzbekistan in 54 projects. Following its re-engagement after significant changes in the country, by the end of 2017 the Bank had signed its first six new operations in Uzbekistan since 2010 for a total of over €153 million.