IFC Invests $15 Million in DemirBank to Boost Gender Equality in Kyrgyz Republic

• International Finance Corporation (IFC) is investing $15 million in Demir Kyrgyz International Bank's (DemirBank) private bond issue
• The investment is to promote financial inclusion, job creation, and gender equality in the Kyrgyz Republic
• Financing will fund small and medium-sized enterprises (SMEs) to allow them access to much-desired capital for growth

In a significant move towards women empowerment, jobs creation, and financial inclusion in the Kyrgyz Republic, the International Finance Corporation (IFC) is investing $15 million in a private placement by Demir Kyrgyz International Bank (DemirBank), a top commercial bank in the country. The investment is to close the finance gap of small and medium-sized enterprises (SMEs) with a special emphasis on financing women entrepreneurs in rural and disadvantaged areas.

The proceeds from the bond will enhance DemirBank's loan portfolio with a focus on those chronically under-funded sectors. In particular, 25 percent of the proceeds will be earmarked for women-owned enterprises to counter one of the most enduring constraints on women's access to credit.

Fewer than 22 percent of the Kyrgyz Republic's registered MSMEs have access to bank credit, and 38 percent have some type of financing constraint, according to the World Bank Enterprise Survey (2023). With a financed gap in MSMEs estimated at 18 percent of GDP, constrained capital access remains a growth and diversification limiting factor.

"IFC's investment reflects our dedication to economic diversification, financial inclusion, and women empowerment," stated L. Sevki Sarilar, DemirBank General Manager. "With long-term local currency financing, we intend to support the development and growth of smaller, particularly women-owned, businesses."

The bond is estimated to create 1,200 to 2,000 direct and indirect employments in five years by facilitating SMEs to increase operations, hire more employees, and access new markets. It will also assist rural entrepreneurs since access to banking is still scarce.

One of the interesting aspects of the investment is that it is denominated in the local currency, thus minimizing currency mismatch risk to lenders. This improves lending to be more stable and less subject to exchange rate volatility—a big consideration in an uncertain economic climate.

"The project supports IFC's effort in deepening financial access and economic resilience in the Kyrgyz Republic," said Alain Nounke, IFC's Regional Industry Manager for Central Asia and Türkiye. "IFC's bond in DemirBank also promotes local capital market growth, with IFC's investment expected to mobilize more investors to such future projects."

The project forms part of IFC's strategy for overall private-sector development in the Kyrgyz Republic, a country that continues to struggle through a difficult post-Soviet transition economy with industrial under-diversification and high out-migration.

By financing DemirBank's bond issuance, the project further deepens lending to SMEs and promotes building the domestic capital market—a key anchor of financial sector reform.

In addition, the investment supports national and international strategies for gender equality, inclusive growth, and decent work since it facilitates more women to contribute significantly to the formal economy.