IFC Achieves Leasing Milestone in Azerbaijan
Washington, D.C., December 27, 2005— The International Finance Corporation, the private sector arm of the World Bank Group, will expand leasing opportunities for small and medium enterprises in Azerbaijan by providing UniBank with a long-term loan of $5 million and technical assistance.
The loan is the first leasing transaction by an international development finance institution in Azerbaijan.
The loan will strengthen UniBank’s ability to meet the financing needs of smaller enterprises—a vital engine of economic growth and major source of employment in developing countries—and enable it to establish itself as one of Azerbaijan’s leading players in the leasing market. Assets financed by UniBank, and its leasing subsidiary UniLeasing, include trucks, cars, minivans, and machinery as well as construction and production equipment.
As a participant in IFC’s technical assistance program, UniBank will benefit from training in lease origination, underwriting, credit analysis, monitoring, and risk management. The technical assistance is provided by IFC and funded by the Swiss government.
The project is part of IFC’s Central Asia Leasing Facility. Within this facility’s framework, IFC provides term funding and technical assistance to strengthen the capacity of local financial institutions in Kazakhstan, Azerbaijan, the Kyrgyz Republic, Uzbekistan, and Tajikistan, and enables them to originate leases for small and medium enterprises.
Shahbaz Mavaddat, IFC’s acting director of Southern Europe and Central Asia, said, "One of IFC’s main objectives in Azerbaijan is to support local financial institutions like UniBank to expand their leasing operations, and so assist in the development of the country’s emerging small and medium business sector, which is important for the further diversification of the Azerbaijani economy in the non-oil sectors.”
Jyrki Koskelo, IFC’s director of Global Financial Markets, said, “The UniBank transaction is a logical extension of the accomplishments of IFC’s broader technical assistance program, which has helped create a transparent and attractive legal and tax environment for leasing and increased public awareness of this sector in Azerbaijan.”
Eldar Garibov, UniBank’s majority owner and chairman of UniBank’s Supervisory Board, said, “UniBank is extremely pleased to partner with IFC. The confidence placed in us by IFC demonstrates the strong position UniBank has established in the market, and will allow us to contribute to the development of the leasing sector in Azerbaijan.”
Faig Huseynov, UniBank’s chairman of the Executive Board, said, “This transaction comes at an important time for UniBank and marks a critical step toward the development of the country’s leasing market and broadening of the financing opportunities for small private enterprises, which are among UniBank’s strategic priorities.”
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.
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