IFC Invests $15M in DemirBank Bond to Empower SMEs, Women in Kyrgyz Republic

In a strategic move to promote financial inclusion, job creation, and gender equality, the International Finance Corporation (IFC) is investing $15 million in a private bond issuance by Demir Kyrgyz International Bank (DemirBank)—one of the leading commercial banks in the Kyrgyz Republic. The initiative aims to bridge the finance gap for small and medium enterprises (SMEs) and empower women entrepreneurs, particularly in underserved and rural areas.

The bond proceeds will be used to expand DemirBank’s lending portfolio, with a focus on sectors and communities that face chronic underfinancing. At least 25 percent of the funds will be exclusively allocated to women-owned businesses, helping dismantle barriers that have traditionally limited women’s access to credit and capital.

Unlocking Growth Potential: A Lifeline for Kyrgyz SMEs

According to the World Bank Enterprise Survey (2023), fewer than 22 percent of formal Micro, Small, and Medium Enterprises (MSMEs) in the Kyrgyz Republic have access to bank financing. An estimated 38 percent of businesses report facing full or partial financial constraints. The financing gap for MSMEs stands at 18 percent of GDP, significantly hampering business expansion and economic diversification.

“IFC’s investment underscores our commitment to supporting economic diversification, financial inclusion, and gender empowerment in the Kyrgyz Republic,” said L. Sevki Sarilar, General Manager of DemirBank. “By providing long-term local currency financing, we aim to empower smaller businesses, particularly women-owned businesses, to grow and thrive.”

The bond is expected to help generate 1,200 to 2,000 direct and indirect jobs over the next five years by enabling SMEs to scale operations, hire more workers, and expand into new markets. The funding will also play a key role in fostering entrepreneurship in rural communities, where banking services are often limited.

Local Currency Financing and Capital Market Development

A distinctive feature of the investment is its provision of long-term local currency financing, reducing currency mismatch risks that borrowers often face when loans are denominated in foreign currencies. This makes borrowing more predictable and less risky for SMEs, especially in volatile macroeconomic conditions.

“This project strengthens IFC’s efforts to enhance economic resilience and expand access to finance in the Kyrgyz Republic,” said Alain Nounke, IFC’s Regional Industry Manager for Financial Institutions Group in Central Asia and Türkiye.

“DemirBank’s bond is expected to support the development of local capital markets, and IFC’s participation sends a strong signal to help attract additional investors to similar initiatives.”

The investment is backed by the Local Currency Facility of the International Development Association’s (IDA) Private Sector Window, which provides risk mitigation tools and concessional resources to promote private investment in the world’s most challenging markets.

Strategic Impact: Inclusive Growth Through Private Sector Development

The partnership is part of IFC’s broader strategy to support private sector-led economic development in the Kyrgyz Republic, a country still undergoing a challenging post-Soviet transition marked by economic shocks, high emigration, and limited industrial diversification.

By enabling DemirBank to issue a private bond, the initiative not only facilitates increased SME lending but also contributes to the development of domestic capital markets—a long-term priority for the country’s financial sector.

Additionally, the project aligns with global and national commitments to gender equality, decent work, and inclusive growth, reinforcing the importance of integrating women into the formal financial system and enabling them to become active economic agents.

A Catalyst for Broader Change

The IFC-DemirBank bond issuance is expected to serve as a template for future investments in local financial institutions, paving the way for similar capital market instruments that can be replicated across Central Asia and other emerging markets.

It is also in line with IFC’s global mission to reduce poverty and promote shared prosperity by catalyzing private investment and strengthening financial ecosystems in underdeveloped regions.

As IFC deepens its engagement in the Kyrgyz Republic, partnerships like this one offer a scalable and sustainable solution to some of the country’s most pressing development challenges—particularly for underserved businesses and women entrepreneurs, who are central to building a resilient and inclusive economy.