ADB to Support Financing for Rural Businesses in Azerbaijan

BAKU, AZERBAIJAN – The Asian Development Bank (ADB) is extending a $50 million loan to AccessBank Azerbaijan (ABA), the country’s sixth largest bank, to support micro-, small- and medium-sized enterprises operating outside of its capital Baku. The loan has a five year tenor and is priced at market conditions.

“The assistance will provide finance for the underserved segment of the economy, which is critical to income generation and employment in secondary towns and rural districts,” said Rainer Hartel, Principal Investment Specialist for Financial Institutions at ADB’s Private Sector Operations Department.

Although rural economic activity contributes less than 10% to the overall economy, it supports 75% of the population, and 38% of employment.

ABA plans to expand its services to micro-, small- and medium-sized enterprises outside Baku by building 18 regional branches by end of 2017, and grow its regional loan book to 55% of total loans.

ABA was established as a greenfield bank by international investors in 2002 serving low-income customers. The business model has been tested successfully in a number of low and lower-middle income economies in Central Asia and Africa.

The bank has an excellent governance track record, and strong shareholder support. It serves more than 130,000 private borrowers, including 34,000 women and has more than 50% of its clients outside the capital Baku. Until 2017, the Bank plans to grow its clientele to about 180,000 borrowers, of which 50,000 women. The Bank’s strong gender inclusive policies will provide further benefits under the transaction.

In 2005, ADB supported ABA’s build up through a $4 million loan, which has been fully repaid.