34671 - Eskhata SL&SD'14

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Summary of Investment Information

Project Number

34671

Company Name

Eskhata Bank OAO

Date SPI Disclosed

Mar 18, 2014

Country

Tajikistan

Region

Central Asia and Turkiye

Projected Board Date

May 20, 2014

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Jul 21, 2014
Signed : Sep 1, 2014
Invested : Sep 5, 2014

Sector

Commercial Banking - Microfinance

Project Description

Eskhata Bank is the fifth largest bank in Tajikistan and offers a wide range of banking services with an emphasis on micro, small and medium enterprises. The Project will support Eskhata’s lending program to small and medium enterprises.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Microfinance Borrowers
Quasi-Equity	Loans to Microfinance Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

1) Increase access to finance for underserved MSMEs, contributing to employment and economic growth of Tajikistan.
2) IFC will create a demonstration effect for the entire banking sector in Tajikistan to upgrade their risk management, E&S, insurance and AML practices following principles that IFC will promote in Eskhata.
3) The Project will enhance brand of Eskhata being a local bank and one of privately-owned reputable banks in Tajikistan and help it achieve its further development milestones.

1) Long-term financing in LCY: the Project will provide Eskhata with a long term funding in LCY, generally unavailable in the market, to support its dynamic growth.
2) Resource mobilization: IFC will try to mobilize additional resources for the Bank through its partners and AMC to help the Bank to increase its lending program to MSMEs.
3) The Project will help Eskhata, IFC''s long term partner in Tajikistan, strengthen its Tier 2 capital and get access to global expertise in banking.

E&S Category Rationale / Risks and Mitigation

E&S Categorization Rational

The proposed project is with the existing IFC client and has been categorized as category FI-2 according to the IFC Environmental and Social Review Procedure. The rational for categorization is based on the assessment of Eskhata Bank’s full portfolio of loans. Bank lending is focused on microfinance and SME loans with the other products being retail and very small percentage of trade finance. The concept of corporate lending is not used. The key sectors financed are trade, services and agriculture. Financing of manufacturing, which could be characterized by higher E&S risks, is at the level of around 11% of the bank’s total portfolio. These business activities have potential limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures.

According to the nature of activities supported with this IFC loan, the client will be required to demonstrate ongoing compliance of its entire loan portfolio with the IFC Exclusion List and national E&S laws of Tajikistan, as well as ensure ongoing compliance of its employment practices with the IFC Performance Standard 2: Labor and Working Conditions and regularly report its E&S performance in accordance with the format to be provided by IFC.

Contacts

For Inquiries About the Project, Contact

Daler Sadikov
Head of International Relations Department
OJSC “Eskhata Bank”
135 Gagarina Street, Khujand
Tajikistan, 735700
Phone: +992 3422 439 45

For Inquiries and Comments About IFC, Contact

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2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

Daler Sadikov
Head of International Relations Department
OJSC “Eskhata Bank”

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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