online briefing with the chairman of the management board of OJSC “Guarantee Fund Malik Abakirov
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.
THE CHAIRMAN OF THE MANAGEMENT BOARD OF OJSC “GUARANTEE FUND” MALIK ABAKROV: SUPPORTING REGIONAL ENTREPRENEURS IS A MAJOR PRIORITY
In 2019, on behalf of OJSC “Guarantee Fund”, the country’s entrepreneurs issued 946 guarantees in total of 932 million KGS, most of which are aimed at regional projects. The information was announced on January 14 by the Chairman of the Management Board of OJSC “Guarantee Fund” Malik Abakirov.
According to data, over the past year, the authorized capital has increased from 582 million KGS to 1.132 billion KGS, an increase of 195%, 946 guarantees were issued and showed an increase of 226% compared with figures for 2018.
“The number of guarantees issued exceeded by 150% the capital of OJSC “Guarantee Fund”, the lion’s share of guarantees was sent to the regions. Over the past year, the total amount of guarantees amounted to 932 million KGS, which is 182% more than in 2018. In 2020, we plan to increase the total amount to 1 billion 200 million KGS. In monetary terms, in all regions, the excess of the amounts of issued guarantees ranged from 108% to 300% compared to 2018,” he declared.
Touching upon the main direction of issued guarantees, the Chairman of the Management Board of OJSC “Guarantee Fund” said that special attention was paid to the areas of processing, construction of logistics centers and slaughterhouses.
Last year was very productive for us and for the country’s processing industry as a whole. In order to implement the Head of State’s policy on the development of regions, the main deviation was made specifically on regional projects. As significant examples, it is possible to note a textile factory in Osh region that is export-oriented. Also, the rubber shoe factory in Bishkek, the plastic pipe factory in Osh, which supports the implementation of the “Taza Suu” project in the regions. New enterprises were opened, the number of jobs in the regions increased”, he declared.
In conclusion, Malik Abakirov noted that OJSC “Guarantee Fund” will continue its activities aimed at supporting the country’s export potential.
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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.