Providing guarantees to entrepreneurs, including exporters
Assistance in small and medium-sized enterprises development
VIDEO “HOW TO OBTAIN THE SERVICES OF OJSC “GUARANTEE FUND”
OJSC “Guarantee fund” – a financial instrument for development
OJSC “Guarantee Fund” is aimed at providing access to financing for small and medium-sized enterprises (SMEs) in case of insufficient collateral throughout the Kyrgyz Republic.
“In 2016, when I was the Prime Minister, I signed the Order on the creation of OJSC Guarantee Fund”. It was a right and timely step. The Fund is demonstrating successful work. Today OJSC “Guarantee Fund” provides support to entrepreneurs, especially those engaged in agro-processing and export production.
We intend to increase the potential of OJSC “Guarantee Fund” by attracting the National Bank of the Kyrgyz Republic, RKDF, so that OJSC “Guarantee Fund” could provide substantial assistance to regional entrepreneurs.
Our goal is establishment of production, agro-processing enterprises and employment of population, that will reduce migration.
From the speech of the President of the Kyrgyz Republic
Sooronbai Jeenbekov at the meeting with representatives
of Kyrgyz and foreign Media on March 7, 2018.
MALIK ABAKIROV: “GUARANTEE IS AN EFFECTIVE TOOL FOR SME SUPPORT”
On January 31, 2019, a press conference was held at the Kabar news agency by the Chairman of the Board of OJSC “Guarantee Fund” Malik Abakirov with the participation of the representatives of the leading media “Kabar”, “Ala-Too-24”, “Birinchi Radio”, “KTRK”, “ElTR”, “Pyramid”, “AKI-press”, radio “Maral”, newspapers “Erkin-Too”, “Bagyt.kg” and others. It was dedicated to the results of the activities of OJSC “GF” for 2018.
The Chairman of the Board of OJSC “Guarantee Fund” (OJSC “GF”) Malik Abakirov told reporters about the results on the activities on support for small and medium enterprises (SMEs) of the republic, providing entrepreneurs with access to financing. The main direction of the activities is the provision of financial guarantees to entrepreneurs on case of insufficient collateral for bank loans.
Capitalization of OJSC “GF”
In accordance with the order of the Government of the Kyrgyz Republic dated June 25, 2018 No. 217-p, the authorized capital of OJSC “GF” increased by KGS 300 million and amounts to KGS 582 million. At the end of 2018, the assets of OJSC “GF” amounted to KGS 819.7 million, of which own capital was KGS 613 million.
About guarantees for entrepreneurs
In 2018 OJSC “Guarantee Fund” provided substantial support to SMEs, providing a total of guarantees in the amount of KGS 507 million. The volume of bank loans under guarantees amounted to KGS 1.779 billion. From the beginning of its activities in 2016 and as of December 31, 2018, Open Joint Stock Company “GF” issued 656 guarantees in the amount of KGS 755 million, and the amount of loans received by entrepreneurs under the guarantees of the Fund amounted to KGS 2.752 billion. According to the results of 2018, a profit was received in the amount of KGS 25.6 million, while the plan was 14.8 million, an increase reached 173 percent.
Thanks to guarantees, 1225 new jobs were created, 5887 existing ones were supported. Export-oriented and import-substituting projects were issued 48 guarantees for KGS 141 million. Women entrepreneurs were issued 196 guarantees in the amount of KGS 224 million.
Guarantees were provided in the following sectors: agriculture and fishing – 20%, manufacturing – 18%, processing of agricultural products – 14%, trade – 24%, tourism – 10%, transport – 6%, services – 7%, construction – 1%. In terms of regions, the quantitative distribution of guarantees is as follows: Bishkek city – 25%, Chui region – 17%, Naryn region – 17%, Osh region – 12%, Jalal-Abad region – 7%, Batken region – 7%, Issyk-Kul region – 8%, Osh – 4%, Talas region – 3%.
In 2018 OJSC “GF” twice received a loan from RKDF amounting to KGS 100 million each. The first was successfully disbursed in the same year. The amount of guarantees issued for 65 projects amounted to KGS 100.5 million.
In September 2018, a new loan agreement was signed with the RKDF. As of January 1, 2019, 13 percent of the loan was disbursed. The amount of guarantees issued for the implementation of 5 projects amounted to KGS 13.2 million.
In accordance with the agreement, these loans are directed to support regional entrepreneurs.
About the program implementation of OJSC “GF”
OJSC “GF” implements projects under the program “One region – one enterprise”. The main goal of the program is to open new enterprises or new directions in existing enterprises in the regions. Within the program, 27 projects are being implemented. The amount of guarantees provided for OROE projects, including export, is KGS 80 million.
The program “Restoration of agricultural machinery in the Kyrgyz Republic” was developed and is being implemented, in the framework of which DOS TJM LLC will assemble Topoz tractors. In 2018, 4 tractors were manufactured. Under the guarantee of OJSC “GF”, a loan was obtained from Aiyl Bank to expand production. Also, with the support of the GF, the company moved to a new production base in Kant and intends to start a stable production of tractors of various modifications for farmers and peasant farms.
The company plans to produce attachments and the gradual localization of production. In the future, the production of electric tractors will be arranged here.
At the end of the press conference, Malik Abakirov, the Chairman of the Board of OJSC “GF”, answered the journalists’ questions. Then a presentation of the book “Access to finance for SME: Guarantee Fund” took place. The authors are Malik Abakirov and Syrgak Abakirov. The book covers the history and formation of guarantee funds in Kyrgyzstan and the role of small and medium enterprises in the economy. It also provides international experience in the provision of guarantees.
Procedure for obtaining guarantee. More…
The Bank independently considers the application of the Borrower, analyzes the submitted documents and assesses the financial condition. If the only obstacle to obtain a loan is insufficient collateral, then the Partner Bank informs the Borrower about the possibility of attracting guarantee of OJSC “Guarantee Fund”.
If the Borrower agrees to obtain a guarantee of the Fund, the Partner Bank will deliver a signed application to OJSC “Guarantee Fund” for guarantee provision. Simultaneously with this application, the Partner Bank sends the required package of documents.
OJSC “Guarantee Fund” in short term from the moment of receiving application takes a decision according to Guarantee application.
In case of a positive decision, a trilateral guarantee agreement is concluded.
The Borrower before obtaining a loan, pays the guarantee commission, according to the established tariff.
Under the Year of Regional Development and Digitalization of the Country. From the beginning of 2018, 25 guarantees were approved in the amount of KGS 54.4 million. The volume of loans approved by banks amounted to KGS 136.4 million. The amounts of guarantees and...read more
SMEs support. In the first decade of February, the process of issuing guarantees shows an increase in their number and amount. That serves as a good indicator of successful work on supporting entrepreneurs throughout the year. Guarantees of OJSC “GF” provide support...read more
This is the success story of Tologon Ibraev, who, thanks to the support of OJSC “Guarantee Fund”, is close to his dream of creating a large enterprise of tractor production in Kyrgyzstan OJSC “Guarantee Fund”: SMEs support Tologon Ibraev is the founder and director...read more
SMEs support instrument. From the beginning of its activities and as of February 5, 2019, OJSC “GF” approved 676 guarantees in the amount of KGS 780.5 million. The amount of loans approved by partner banks amounted to KGS 2.816 billion. Since the beginning of 2019, 20...read more
Press conference. On January 31, 2019, a press conference was held at the Kabar news agency by the Chairman of the Board of OJSC “Guarantee Fund” Malik Abakirov with the participation of the representatives of the leading media “Kabar”, “Ala-Too-24”, “Birinchi Radio”,...read more
Guarantees for entrepreneurs. In January, entrepreneurs demonstrated quite high activity despite the usual passivity at this time of the year. This month, 19 guarantees were approved in the amount of KGS 25.2. Under these guarantees, partner banks approved loans in...read more
In 2019, the activities of OJSC “GF” take place under the Year of Regional Development and Digitalization of the Country, declared by the President of the Kyrgyz Republic S. Jeenbekov. This means continuing the policy of supporting the regions, the goal is to improve...read more
In January of this year, 7 guarantees were approved, of which one guarantee was obtained by the exporter, the second by a woman entrepreneur. The amount of guarantees amounted to KGS 5.6 million and the amount of loans approved by partner banks under guarantees was...read more
Results of 2018. As it is known, the Concept of Regional Policy of the Kyrgyz Republic for the period 2018-2022, adopted by the Government of the Kyrgyz Republic No. 194 of March 31, 2017, is being implemented in Kyrgyzstan. In the framework of...read more
OJSC “GUARANTEE FUND” TARGET GROUP
Entrepreneurs (including women entrepreneurs) of SME segment with activities focused on the production and processing of agricultural products, industry, services, as well as SMEs with export-oriented and import-substituting activities.
OJSC “GUARANTEE FUND” OPERATING CONDITIONS
The maximum guarantee amount is up to 50% of the loan amount and not more than 10% of the capital amount (KGS 7 million or the equivalent of USD 100 thousand).
The process of obtaining a loan with OJSC “Guarantee Fund” More…
The client comes to the bank for a loan and if they cannot get the necessary amount due to insufficient collateral, the client and the bank apply to OJSC “Guarantee Fund” for guarantee.
OJSC “GUARANTEE FUND” MISSION
The mission of the Fund is to ensure the dynamic and sustainable growth of the economy of the Kyrgyz Republic by developing a market of guarantees, to increase the share of SMEs to the country’s GDP and to improve the population’s welfare.
OJSC “GUARANTEE FUND” FUNCTIONS
- Providing a guarantee to entrepreneurs, including exporters;
- Participation in the Program of the Government of the Kyrgyz Republic “Financing of Agriculture”;
- Providing a guarantee to agricultural producers;
- Assistance in the development of small and medium enterprises;
- Assistance in the development of Regional Guarantee Funds.
OJSC “GUARANTEE FUND” VISION
The Fund will become a stable developing financial organization of the Kyrgyz Republic providing SMEs with the ability to obtain affordable loans by development of a guarantee system.
By the end of 2020 the Fund will become the leading financial institution in the market of the guarantee provision for SMEs and will contribute to attract potential local and international investors.
OJSC “GUARANTEE FUND” (THE FUND) AND REGIONAL GUARANTEE FUNDS (RGF) INTERACTION
- Institutional development of RGF;
- Possibility of RGF’s partial capitalization, Fund – 70%; local government-30%;
- Opening of Fund’s branches in regions with no RGF and no possibility of capitalization from local government;
- Conducting potential customer evaluation by RGF to provide guarantees under a contract with the Fund;
- Providing a reguarantee for large projects
- Issuance of guarantees to businessmen.