Baku: The European Bank for Reconstruction and Development (EBRD) is allocating up to 20 million US dollars in credit to “AccessBank” to support micro, small, and medium-sized enterprises (SMEs) in Azerbaijan that are led by or owned by young people (within the framework of the “Youth in Business for Caucasus Programme”), APA-Economics reports, citing the EBRD.

According to Azeri-Press News Agency, the credit will be provided in two equal tranches, each with a term of 3 years, including a 1-year grace period. The decision on the allocation of the second tranche has been delegated to the EBRD management.

The EBRD notes that the project has both inclusive and competitive features and aims to increase the volume of business loans for youth in the country, strengthen “AccessBank’s” capacity, and develop financial literacy among young entrepreneurs.

The information indicates that within the framework of the project, AccessBank will benefit from innovative financing instruments such as Results-Based Compensation (RBC) and First Loss Risk Sharing (FLRC) mechanisms. Through these mechanisms, young entrepreneurs will be offered lower interest rates and more flexible collateral requirements.

The program will be financed by the European Union through the European Fund for Sustainable Development (EFSD+) and SSF mechanisms. The project also includes technical support and training components under the Advisory Services for Small Businesses (ASB) program.

The EBRD stated that the credit funds will be directed only to SMEs owned or managed by young people, and these projects will carry low environmental and social risks.