IFC Backs Tajikistan’s Bank Arvand with $5m Loan to Boost SMEs and Housing

The initiative aims to strengthen financial inclusion, support housing finance, and promote energy efficiency in one of Central Asia’s most underserved markets.

The International Finance Corporation (IFC) has announced a $5 million local currency loan to Bank Arvand, one of Tajikistan’s leading microfinance institutions, to expand access to credit for small businesses, women entrepreneurs, rural households, and low-income families. The initiative aims to strengthen financial inclusion, support housing finance, and promote energy efficiency in one of Central Asia’s most underserved markets.

Expanding Access to Finance in Rural Tajikistan

Bank Arvand, an IFC partner since 2019, plays a pivotal role in serving communities that have historically faced barriers to financial services. With a client base of over 58,000 borrowers nationwide, the institution focuses on micro and small enterprises (MSEs), rural entrepreneurs, and women-led businesses.

The new IFC loan will:

• Increase lending to small businesses and women-owned enterprises, many of which face difficulties accessing credit.

• Boost microloans for low-income households, helping families in rural areas to build or renovate homes.

• Support energy-efficient housing finance, reducing long-term costs for households and promoting sustainability.

Shoira Sodiqova, CEO of Bank Arvand, highlighted the importance of the investment:

“Micro businesses and women entrepreneurs are a key part of Tajikistan's economy. This financing from IFC will make it possible for more of them to access credit, expand, and create jobs. In addition, we aim to help address the current lack of access to affordable housing finance.”

Addressing Tajikistan’s Financing Gap

Small and medium enterprises (SMEs) contribute around 60 percent of Tajikistan’s GDP, yet they continue to face significant financing challenges. The SME and microenterprise financing gap is estimated at nearly 20 percent of GDP—or almost $3 billion. This shortage is particularly acute in rural areas, where informal micro businesses remain the primary income source for many households.

Access to affordable housing finance is also a critical gap, especially for low-income families who struggle to obtain loans for new housing or renovations. IFC’s partnership with Bank Arvand aims to close this gap by offering long-term credit solutions that improve living standards and strengthen economic resilience.

Supporting Energy Efficiency and Sustainable Growth

The IFC-backed facility also integrates energy efficiency measures, encouraging borrowers to adopt sustainable housing and business practices. This not only supports environmental goals but also helps households and businesses cut energy costs—a vital factor in Tajikistan, where high energy demand and limited infrastructure can strain both families and enterprises.

Wiebke Schloemer, IFC Director for Türkiye and Central Asia, emphasized the broader significance of the investment:

“By partnering with Bank Arvand, IFC aims to unlock opportunities for thousands of individuals and small businesses, including women-owned enterprises, while strengthening resilience in Tajikistan’s banking and housing sectors. This collaboration will also advance energy-efficient initiatives, fostering innovation and driving sustainable economic growth.”

Supported by Blended Finance Tools

The financing package is supported by the International Development Association (IDA) Private Sector Window (PSW), which provides blended finance tools to mitigate risks in fragile and low-income economies. Specifically:

• The PSW Blended Finance Facility will offer a pooled first-loss guarantee.

• The PSW Local Currency Facility will reduce currency risks for Bank Arvand and its clients.

The project is part of IFC’s MSME Finance Base of the Pyramid (BOP) Platform, which was established to expand financing for small businesses in emerging markets struggling with the aftermath of the COVID-19 pandemic and other related economic pressures.

A Step Toward Inclusive Growth

This initiative reflects IFC’s broader commitment to strengthening financial systems in Central Asia and enabling inclusive, sustainable growth. For Tajikistan—where small businesses form the economic backbone and housing needs remain acute—the partnership with Bank Arvand represents a strategic step toward resilience, innovation, and long-term development.