EBRD considers $100mn loan to support ailing Tajik banking sector

By bne IntelliNews October 17, 2016

The European Bank for Reconstruction and Development (EBRD) is considering a $100mn loan to support the ailing Tajik banking sector, EBRD Central Asia Director Neil McKain said during his visit to the country on October 14, Asia-Plus reports.

Tajikistan’s banks have been hit hard by the country’s economic problems, much of them linked to declining exports and remittances with Russia, which have left many of the country’s businesses and individuals unable to repay their loans to banks and microfinance institutions.  

The rise in NPLs has eroded the bank’s capital buffers. Tajik banks’ aggregate average capital adequacy ratio (CAR) has been consistently falling from 25.9% in 2012 to 11.1% in 2015

The EBRD, the International Monetary Fund (IMF) and the World Bank are developing a joint programme to support the struggling Tajik banking sector, McKain said, adding that the provision of the loan will be based on the IMF and the World Bank’s conditions. 

TSB, which has assets of TJS3.8bn (€430.5mn), is currently seeking help to avert a potential liquidity crisis, as the country’s entire banking sector faces troubles. TSB has invited the EBRD to acquire a 50% equity stake in the bank, which currently has a total equity of $80mn, TSB chairman Tojidin Pirzoda told bne Intellinews in an interview in May.

The National Bank of Tajikistan took control over TSB and appointed Mirhayot Yokubov as an interim manager in May. The Tajik central bank has also taken over Tajprombank, since then. Other troubled Tajik banks include, Agroinvestbank, which is the country’s largest bank.

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