Financial and Private Sector Development Project

The development objective of the Financial and Private Sector Development Project for Tajikistan is to strengthen deposit insurance, promote bank lending to micro, small and medium-sized enterprises (MSMEs), and boost MSME integration in value chains. The project comprises of four components. The first component, deposit insurance will use a set of disbursement conditions, investments, and technical assistance to improve depositor trust, mitigate the likelihood of bank runs, and contribute to greater deposit mobilization. It consists of following sub-components: (i) individual deposit insurance fund (IDIF) financing; (ii) payout automation; and (iii) public awareness campaign. The second component, partial risk-sharing facility (PRSF) will finance a PRSF and related capacity building to share the credit risk of eligible MSME loans extended by eligible participating financial institutions (PFIs) through guarantee funds (GFs), in order to support MSMEs facing collateral constraints or higher risk aversion by banks. It consists of following sub-components: (i) PRSF financing; and (ii) capacity building. The third component, supplier and export development program will fund the capacity building and partial reimbursement grants for MSMEs to strengthen their linkages with prominent local and multinational corporations. It consists of following sub-components: (i) technical assistance and capacity building; and (ii) partial reimbursement grants. The fourth component, project implementation, coordination, and management will finance overall project implementation, coordination, and management.