FMO, the Dutch entrepreneurial development bank, announced the signing of a loan agreement with the Joint Stock Commercial Bank with Foreign Capital "Hamkorbank", a commercial bank in the Republic of Uzbekistan, for a syndicated facility of USD 100 mln. The funds from FMO-led syndication will be used to finance microentrepreneurs as well as Women- and Youth-owned SMEs, thus contributing to reducing inequalities in the country. The 3-year facility with a flexible currency option will be available in local currency for up to USD 50 mln and in USD for a minimum of USD 50 mln. USD 50 mln was mobilized from private sector funds managed by FMO Investment Management and by the ILX Fund -a Amsterdam-based asset manager focused on supporting the Sustainable Development Goals in emerging markets and a trusted partner for FMO.
MSMEs play a crucial role in the Uzbekistan's economy, accounting for about 54% of GDP and 78% of the employment. However, the number of MSMEs with access to bank loans in Uzbekistan remains quite low at approximately 22%. Although the promotion of MSMEs is very important for the further development of the country's economy, improving their access to finance is an urgent issue.
Hamkorbank is the largest privately-owned bank in Uzbekistan, and is the 9th largest bank in the country, making up roughly 3% of the country’s market share. With over 3300 employees and branches in all major cities and most regions in the country, HB provides comprehensive financial services and products to complement its financing of SMEs.
As one of the leading impact investors supporting sustainable private sector growth in emerging markets across the globe, FMO began its cooperation with HB in 2012. Since then, FMO and JSCB Hamkorbank have signed several loan agreements aimed at financing small and medium sized businesses in Uzbekistan. FMO has been one of the shareholders of JSCB Hamkorbank since 2014, after which the collaboration intensified, as demonstrated through this latest loan.
The partnership with FMO has funded more than 1000 small and medium-sized businesses under previous loan agreements, and about 800 new jobs have been created through projects funded through this line. In the future, Hamkorbank will strengthen our cooperation with the FMO and work closely to finance new projects.
Huib-Jan de Ruijter, Co-Chief Investment Officer at FMO, said, “We are thrilled to have once again supported our existing client Hamkorbank and their mission of supporting micro and SME entrepreneurs throughout Uzbekistan. Not only does their focus on reducing inequalities aligns strongly with FMO’s broader mission of enabling entrepreneurs to achieve sustainable and inclusive prosperity, their “more than a bank” agenda with a clear focus on strengthening their ESG capacities showcases their commitment to sustainable financing. We look forward to jointly creating more impact throughout Uzbekistan with Hamkorbank.”
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About ILX
ILX Fund is an Amsterdam-based asset manager specialising in global development finance co-investment strategies. The fund provides institutional investors access to investment opportunities in the development finance asset class. ILX Fund is a solution that bridges the gap between the institutional investors seeking to achieve a higher sustainability profile of their investments in emerging markets, and the need to mobilize private sector finance towards the SDGs and climate finance projects. The fund’s investment strategy is underpinned by strong partnerships with global Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs), which centres around SDG-aligned co-investments, particularly within the realm of Climate Finance.
