The World Bank has approved funding for the Tajikistan Financial and Private Sector Development Project in the amount of US$50 million.
The goal is to structure the system by strengthening deposit insurance, stimulating bank loans for micro, small, and medium-sized enterprises (MSMEs), and assisting their integration into value chains. This will form a greater confidence of the population in the banking system, stimulate the economy and entrepreneurship, and create new jobs.
Tajikistan is going through a period of good economic development, but the system is dominated by state-owned enterprises with low productivity. This is why it is important that growth is accompanied and multiplied by private sector development, especially in high value-added sectors such as agri-food, textiles, and tourism.
“In order to put the country on a path to more inclusive growth, it is important to build a strong and stable private sector and financial system,” explained Ozan Sevimli, World Bank Country Manager for Tajikistan. “The new project is aimed at stimulating, among other things, corporate lending by providing a partial loan guarantee under the individual and portfolio model, which is expected to benefit 5,000 MSMEs under the Partial Risk Sharing Facility. This will stimulate the growth of entrepreneurship and contribute to the overall economic viability of Tajikistan.”