Baku, Azerbaijan, May 16, 2007—IFC, the private sector arm of the World Bank Group, and the Micro Finance Bank of Azerbaijan today announced the launch of a Supplier Finance Facility to improve access to finance for local small and medium enterprise suppliers to the oil and gas industry in Azerbaijan. The $15 million investment project is led by IFC in partnership with BP, the transnational energy company, and its co-venturers, who are shareholders in a number of oil and gas projects in Azerbaijan.
“Insufficient collateral is one of the main factors that limits access to finance for small and medium enterprises, slowing their development. The Supplier Finance Facility is designed to address this problem and will help us boost SME development in Azerbaijan ,” said Andrew Pospielovsky, General Manager of the Micro Finance Bank of Azerbaijan .
The SFF is a joint-credit facility funded by BP on behalf of its co-venturers, IFC, and MFBA. Loans to local suppliers are partially backed by the local companies’ contracts with BP.
“This project is a great example of how IFC can bring together production companies and financial institutions to improve access to finance for local SMEs. Supplier finance is an exciting, new initiative, and we hope to develop similar projects in the future,” said Jyrki Koskelo, IFC Director for Global Financial Markets.
Local companies eligible to receive loans from the facility will be prequalified by the BP-operated Enterprise Centre. Launched in May 2002, the center serves as a one-stop shop to help SMEs develop their businesses to support major oil and gas developments in Azerbaijan .
“This project improves access to finance for smaller business, while helping them leverage linkages with larger companies. It is a good example of how IFC can work to increase the value added that large projects in the oil and gas sector can bring to host countries, their businesses, and local communities,” said Somit Varma, IFC Associate Director for Oil, Gas, Mining, and Chemicals.
“Through the implementation of this project, IFC recognizes the importance of developing
the oil and gas service sector for Azerbaijan ’s long-term growth,” said Shahbaz Mavaddat, IFC Director for Southern Europe and Central Asia. “This project also highlights the very positive role SMEs can play,” he added.
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit www.ifc.org .
The IFC Business Linkages program helps connect SMEs to larger firms that sponsor IFC investment projects, creating jobs and generating income in local communities while benefiting IFC clients.
About the Micro Finance Bank of Azerbaijan
MFBA is a full-service bank owned by IFC, the European Bank for Reconstruction and Development, the Black Sea Trade and Development Bank, KfW Development Bank, Access Microfinance Holding, and LFS Financial Systems GmbH, a German consulting company that manages the bank.
MFBA’s mission is to be the leading provider of financial services to privately owned micro, small, and medium enterprises in Azerbaijan. It currently serves over 25,000 clients, including more than 18,000 businesses, through 13 branches across the country.
About BP in Azerbaijan
BP and its co-venturers are implementing world-class oil and gas development and export projects in the region. These projects present a great opportunity to make a positive difference to the people of Azerbaijan. Georgia. and Turkey. In Azerbaijan. these regional development and community programs focus on community investment, enterprise development, and effective governance.
Category: Payday loans