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.
THE PRESIDENT SIGNED THE LAW “ON GUARANTEE FUNDS IN THE KYRGYZ REPUBLIC”
On April 13, 2019, the President of the Kyrgyz Republic, Sooronbai Jeenbekov, signed the Law “On Guarantee Funds in the Kyrgyz Republic”.
The law was enacted by the Jogorku Kenesh of the Kyrgyz Republic on March 7, 2019.
The purpose of the enacted Law is to improve the legal regulation for establishment and development of guarantee funds in the Kyrgyz Republic.
The law defines the legal and economic bases for establishment and activity of guarantee funds.
With its entry into force, the current Law of the Kyrgyz Republic of July 30, 2013 No. 167 “On Guarantee Funds in the Kyrgyz Republic” will become invalid.
The law enters into force 15 days after the date of official publication.
“When I was the Prime Minister, we established Guarantee Fund. Why regions were not developing? Because loans and fiscal policy did not reach them. Entrepreneurs did not have property to put as collateral. Now attention is paid to this problem and state Guarantee Fund helps them. Financing from Guarantee Fund has tripled, guarantees amounting to KGS 755 million were issued to 655 projects. Partner banks of Guarantee Fund doubled loan issue and generally issued loans amounting to about KGS 3 billion. This amount will increase, special attention will be paid to the regions and processing”.
From the speech of the President of the Kyrgyz Republic Sooronbai Jeenbekov on February 21, 2019 during the meeting with residents of Suzak district of Jalal-Abad region.
MALIK ABAKIROV ABOUT ACTIVITIES ON SME SUPPORT
On April 23, 2019, a press conference was held at the Kabar news agency for the media by the Chairman of the Board of the OJSC “Guarantee Fund” (Guarantee Fund) Malik Abakirov about activities on SME support.
— Asian Development Bank (ADB) recognized the Kyrgyz model of guarantee funds as successful and recommended for implementation in the countries of Central Asia and the Caucasus;
— In accordance with the order of the Government of the Kyrgyz Republic dated June 25, 2018 No. 217-p, the authorized capital of Guarantee Fund increased by KGS 300 million and amounts to KGS 582 million;
— Guarantee Fund through its own efforts has developed and implemented the principles of accounting and financial statements in accordance with IFRS-9. This is a big step forward for Guarantee Fund as a financial institution in the application of modern financial instruments;
— A supervisory body was created – the Board of Directors;
— At the end of December 2018 – early January 2019, the Chamber of Accounts of the Kyrgyz Republic audited the activities of Guarantee Fund for the period from January 1, 2016 to December 31, 2017, that resulted in the confirmation of the transparent and effective activities of Guarantee Fund which are carried out within the framework of the requirements of the Law of the Kyrgyz Republic on Guarantee Funds in the Kyrgyz Republic and corresponds to the goals and objectives;
— In 2019, laws relating to guarantee funds of the Kyrgyz Republic were adopted, aimed at streamlining and improving their activities.
Guarantee support for SME
In the Year of regional development and digitalization of the country, Guarantee Fund continues its activities to support regional entrepreneurs. Thus, for the 1st quarter, 90 guarantees were issued in the amount of KGS 135 million. Entrepreneurs of Chui region, in particular, were issued 19 guarantees (22%), Bishkek city – 23 (25%), Naryn region – 15 (17%), Issyk-Kul region – 11 (12%), Jalal-Abad region – 10 (11 %), Batken region – 7 (8%), Osh region – 3 (3%), Talas region – 1 guarantee (1%), Osh city – 1 guarantee (1%).
Guarantees were issued in agriculture – 40 guarantees, processing of agricultural products – 2, manufacturing – 13, the rest in the sphere of tourism, transport, construction, trade and services.
The main stream of guarantees fell on Aiyl Bank – 37, RSK Bank – 13, KICB and CB “Kyrgyzstan” – 10 guarantees each. Guarantees were also issued to customers of other partner banks of Guarantee Fund. In the first quarter of 2019, thanks to the guarantees, 117 new jobs were created and 653 existing jobs were maintained.
Assets of Guarantee Fund as of March 31, 2019 amount to KGS 832,321 thousand, capital – KGS 609,582 thousand, including the authorized capital – KGS 582,000 thousand.
Net profit of Guarantee Fund for the 1st quarter of 2019 amounted to KGS 9,264 thousand (163%) with the plan of KGS 5,682 thousand. Compared to the same period in 2018, the net profit was KGS 6,346 thousand more (the growth rate – 318%).
Guarantee Fund implements projects within the framework of the program “One region – one enterprise” (OROE). The main goal of the program is to establish new enterprises or new directions in the existing enterprises in the regions. Within the framework of the program, 32 projects are being implemented. The amount of guarantees provided for the OROE projects, including export, amounted to KGS 98.6 million. The total amount of guaranteed loans reached KGS 296.9 million.
Among the projects supported by Guarantee Fund are the production of wooden boxes for fruit and berry crops in the Alamudun district, the production of rubber footwear in Bishkek, the production of crushed stone in the Batken region and others.
As for the program “Restoration of agricultural machinery in the Kyrgyz Republic”, 1 project of Dos TJM LLC is being implemented. The company assembles tractors under the brand name “Topoz”. A guaranteed loan was obtained in Aiyl Bank to expand production. With the support of Guarantee Fund, the company moved to a new production base in the Issyk-Ata district. Since the start of production at the new base, 7 tractors of various modifications were assembled.
Procedure for obtaining guarantee. More…
The Borrower contacts one of partner banks of OJSC “Guarantee Fund” with loan application
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.
Obtaining a loan.
Please accept our warm greetings and congratulations on Eid al-Fitr!read more
DEPUTY CHAIRMAN OF BOARD OF GUARANTEE FUND AZAMAT KOZHOBAEV PARTICIPATED IN BISHKEK INTERNATIONAL FINANCIAL FORUM 2019
Bishkek International Financial Forum BIFF 2019, organized by the NBKR and the Union of Banks of Kyrgyzstan, took place on May 30-31, 2019 in Bishkek. Azamat Kozhobaev, the Deputy Chairman of the Board of the OJSC “GF”, took part in it. On the first day, the forum was...read more
Dairy sector. The Order of the Government of the Kyrgyz Republic No. 148-p was issued on May 23, 2019, that identified OJSC “Guarantee Fund” as one of the participants in the implementation of the International Development Association (the World Bank) project...read more
Only recently, many Kyrgyz entrepreneurs could not obtain bank loans in full due to the lack of collateral, that forced them to take smaller loan amounts or use expensive borrowed funds of other financial and loan institutions. In the latter two cases, this entailed...read more
Guarantees for entrepreneurship. As of May 29, 2019, Guarantee Fund approved 838 guarantees in the total amount of KGS 1.039 billion. Thanks to guarantees on loans, partner banks approved guaranteed loans to entrepreneurs in the amount of KGS 3.582 billion. Since the...read more
SME support. With our guarantees entrepreneurs actively used loan resources of commercial banks for project implementation and further business development. From November 2016 and as of May 27, 2019, Guarantee Fund approved 836 guarantees in the amount of KGS 1.025...read more
Consulting services. As it is known, one of the issues that prevent the full and progressive development of SMEs in the Kyrgyz Republic is the low level of the knowledge of entrepreneurs in the field of business organization, planning, financial issues, business risks...read more
Guarantees for SME. “In our country, conscientious entrepreneurs establishing enterprises in the regions, creating new jobs and bringing income to the treasury of the state, should be the most respected people,” said the President of the Kyrgyz Republic Sooronbai...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.