The Commerce Bank of Tajikistan is one of the more recent additions to Faroz’s business empire.
The bank was founded in 2002 as a microcredit lender in the city of Khujand, then operating under the name Muzaffariat. Its prospects rose when it was named one of the three local lenders chosen by the World Bank to participate in a project to extend microcredits to Tajik farmers.
But a new decree passed by the National Bank in 2015 toughened the capital requirements for microcredit lenders. According to Muzaffar Chumayev, Muzaffariat’s former owner, the company was not able to raise enough additional capital to meet the new requirements, and as a result, he was forced to sell it. It’s not clear whether Faroz was the initial buyer. But by last fall, the microcredit lender had changed its name, obtained a full banking license, and had been acquired by Faroz.
The company’s entry into Tajikistan’s banking sector came at a time of continued turmoil. The government spent the equivalent of over a fifth of its budget bailing out four banks in 2016. But two of them subsequently lost their licenses anyway, leaving depositors without their savings. Several other banks have received government bailouts.
Meanwhile, the bank owned by Faroz appears to be expanding. It joined the international SWIFT payment system in January and has opened three new branches since March.
