ITFC grants Agrobank $10m to trigger economic recovery in Uzbekistan

By Zainab Iwayemi

The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, has approved $10 million as a Murabaha financing facility, for the Uzbekistan joint stock commercial bank, “Agrobank”, in order to support private sector development through the provision of financing for local SMEs in the country.

The grant is aimed at supporting import and pre-export financing needs of SMEs in Uzbekistan thereby contributing to the nation’s recovery from the impact of covid-19. This is in alignment with the financing, implemented under a $500 million Framework Agreement signed between the Republic of Uzbekistan and ITFC in January 2019.

In addition, the grant also corresponds with the ‘recovery’ initiative of IsDB Group ‘3Rs’ Programme which aims to support member countries in order to mitigate against the overall impact of the pandemic.

Hani Salem Sonbol, chief executive officer of ITFC, speaking of the contribution that the financing will make, noted that it will facilitate foreign trades between countries, especially as the pandemic has disrupted economic activities.

“The trade finance agreement between ITFC and Agrobank will support the provision of financing to local SMEs across the country as Uzbekistan’s private sector recovers from the adverse economic impact of COVID-19. The funds, which are allocated under Murabaha structure, will provide needed lifeline to importers and exporters during a time of global economic crisis and help protect the lives and livelihoods of people dependent on the country’s job-creating SMEs,” Sonbol said.

International Islamic Trade and Finance Corporation established to advance trade among OIC member countries thereby contributing to the overarching goal of improving socioeconomic conditions of the people across the world. Since it commenced operation in 2008, the ITCF has provided more than $51 billion of trade financing to OIC member countries, making the corporation the leading provider of trade solutions for OIC member countries’ needs.

In 2018 the bank approved six lines of finance, which sum up to $46 million, in favour of local banks in Uzbekistan.