EBRD and EU Boost Support for MSMEs in Central Asia and Mongolia

The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are enhancing access to finance for micro, small, and medium-sized enterprises (MSMEs) in Central Asia and Mongolia.

An additional €25 million in EU guarantees will be made available to local partner financial institutions for on-lending to this business segment. This marks an expansion of the existing Growth4All guarantees to a region where MSMEs form the backbone of the economy but often struggle to obtain finance to grow their business, The Caspian Post reports citing EBRD. The comprehensive package is expected to support the supply and demand of MSME financing by reducing associated risks and encouraging financial intermediaries to direct new lending to businesses that need it the most. It is expected to benefit around 3,500 businesses across the Kyrgyz Republic, Kazakhstan, Mongolia, Tajikistan, Turkmenistan and Uzbekistan

The EU is providing the guarantees through its European Fund for Sustainable Development Plus (EFSD+), which supports financing and investment operations in partner countries outside Europe, in line with the EU’s Global Gateway investment strategy.

“We are very proud to support micro, small and medium-sized enterprises through this guarantee, which is now also available in Central Asia and Mongolia. This is yet another strong example of how our cooperation with the European Union as our key partner responds to the everyday needs of businesses in the region, while at the same time underlining our determination to support strong, resilient and inclusive businesses," EBRD President Odile Renaud-Basso said.

“This agreement will see the EU partner with the EBRD to provide an additional €25 million in guarantees under the Growth4All initiative, expanding access to finance for micro, small, and medium-sized enterprises in Central Asia and Mongolia. As the backbone of these countries' economies, facilitating their access to finance will help create new jobs and opportunities, driving inclusive and resilient economic growth. This partnership demonstrates the EU's commitment to building and deepening mutually beneficial relationships worldwide, aligning with the EU's Global Gateway investment strategy,” European Commissioner for Economy and Productivity; Implementation and Simplification Valdis Dombrovskis stressed.