IFC Launches First Catalytic First Loss Guarantee in Uzbekistan

Tashkent, Uzbekistan (UzDaily.uz) — The International Finance Corporation (IFC) has made its first investment in Uzbekistan under its Catalytic First Loss Guarantee (CFLG) Programme.

The transaction was carried out in partnership with Ipak Yuli Bank, a long-standing IFC partner in the country. The financing is intended to support micro, small and medium-sized enterprises (MSMEs), with a particular focus on microbusinesses, green projects and women-led companies. The deal will provide risk coverage for an MSME loan portfolio of about US$100 million equivalent in local currency.

The CFLG Programme operates under IFC's US$4 billion MSME Finance Platform. It enables IFC to provide first-loss coverage to partner banks through blended finance mechanisms supported by the International Development Association's Private Sector Window (IDA PSW). The structure includes two tranches: a US$9 million first-loss guarantee fully backed by an IDA20 PSW counter-guarantee, and a US$9 million senior tranche guarantee for Ipak Yuli Bank. IFC's maximum exposure under the transaction is US$18 million, which is expected to mobilise a total of US$82 million in lending for MSMEs.

MSMEs account for more than 50% of Uzbekistan's gross domestic product, but the sector continues to face limited access to finance. The unmet demand for small business lending is estimated at around US$10.5 billion, limiting companies' ability to expand operations, attract investment and create jobs.

Umidjon Khakimov, Chairman of the Management Board of Ipak Yuli Bank, said the bank had become the first participant in Uzbekistan to join the IFC programme. He said the guarantee mechanism would help expand lending to underfinanced MSMEs, particularly microenterprises and women-led businesses, while increasing financing for green and climate-related projects.

IFC and Ipak Yuli Bank have been working together since 2018. During that period, IFC has provided the bank with a total of US$87 million in financing, including a US$67 million syndicated loan. The funds have supported small businesses, women-owned enterprises, and micro and small companies engaged in trade finance.

Momina Aijazuddin, IFC Director for Financial Institutions in the Middle East, Central Asia, Türkiye, Pakistan and Afghanistan, said the partnership with Ipak Yuli Bank reflected IFC's commitment to Uzbekistan's sustainable and inclusive development. She said that by directing private capital towards microenterprises, women-led businesses and environmentally focused companies across the country's regions, IFC aims to reduce the financing gap and support Uzbekistan's transition to a more sustainable economic model.

In addition to financing, IFC will provide Ipak Yuli Bank with advisory support to enhance its product range and services for MSME clients.

Founded in 1990, Ipak Yuli Bank is a universal commercial bank in Uzbekistan serving small businesses, entrepreneurs and retail customers through a network of 17 branches, 47 express centres and 27 specialised cash offices across eight regions of the country.

IFC, a member of the World Bank Group, is the world's largest development institution focused on the private sector in emerging markets. In fiscal year 2025, IFC committed a record US$71.7 billion to private companies and financial institutions in developing countries.