Kazakhstan’s KMF Bank and the Turkic Investment Fund (TIF) have signed a $10 million financing agreement. This is the fund’s first deal in the region. The money will go to support small and medium-sized businesses trading with the organization’s member countries.
What happened
KMF Bank will direct the raised funds to lend to micro, small, and medium-sized enterprises. This is reported by the publication Kapital.kz.
Priority in issuing loans will be given to projects that promote mutual trade and cooperation between TIF member states. The agreement marks the fund’s first practical step in capital allocation since its foundation.
Country and market
Kazakhstan. KMF is historically the country’s largest microfinance organization, which recently underwent a transformation and obtained a banking license.
The Turkic Investment Fund was established in 2023 in Ankara. The founding members include Azerbaijan, Hungary, Kazakhstan, Kyrgyzstan, Turkey, and Uzbekistan. The organization’s main task is to finance joint infrastructure, agricultural, and IT projects for the region’s economic integration.
Why it matters
For KMF Bank, the deal solves two tasks at once: it provides an influx of funding for business lending and confirms its status as a reliable borrower on an international level in its new capacity as a bank.
For the Central Asian market, this is an indicator that the political agreements of 2023 have moved into the stage of real financial operations.
The region has received a new source of institutional liquidity, which in the future will begin to compete with traditional lines from the EBRD and the Asian Development Bank.
What’s next
The market has yet to see how quickly KMF will distribute the received $10 million among entrepreneurs. The next indicator of TIF’s activity will be announcements of similar credit lines for banks in Uzbekistan and Kyrgyzstan.