Minister of Economic Affairs of the Kyrgyz Republic Arzybek Kozhoshev reported at the briefing today on October 3, 2016.
According to his report, on September 30 of this year in Bishkek the Deputy Minister of Finance of the Russian Federation Sergei Storchak chaired the regular meeting of the Board of Russian Kyrgyz Development Fund.
At the meeting of the Board one of issues on agenda was consideration of RKDF participation in capitalization of OJSC “Guarantee Fund”.
At the conclusion, the Board supported participation of RKDF in capitalization of OJSC “Guarantee Fund” and RKDF was suggested to explore mechanism for engagement.
OJSC “Guarantee Fund” was created by Order of the Government of the Kyrgyz Republic from June 23, 2016 on “Creation of OJSC “Guarantee Fund””. To date, the capital of OJSC “GF” is KGS 72 million, funds are allocated from the republican budget.
Besides, within the program “Improving Investment Climate – subprogram 2” funds in the amount of USD 3 million will be allocated from the Asian Development Bank. In total, the capital of OJSC “GF” must be about KGS 280 million.
According to results of 2015, share of small and medium-sized enterprises to total GDP made up 40,5 %, that means contribution of SMEs to economy of the country is great and relevant. Thereby, one of the most important instruments of SME development is access to finance, i.e. long-term and easy money.
However, due to insufficient collateral (according to data of banks, from 40% to 50% of borrowers cannot obtain necessary amount of loan), and also due to poor real estate market in regions (requirements of banks for collateral is not less than 120% from the loan amount), loan obtaining is challenging task for SME, especially in regions. Accordingly, all this does not promote development of economy and entrepreneurship.
The aim of RKDF is providing SMEs with access to financial resources.
The main objectives of RKDF are:
- SMEs loan scheme development;
- Maximum financial satisfaction and support for SMEs incl. start-up projects;
- Increasing SMEs sustainability;
- Increasing production of products and services, sales and tax revenues into the budget;
- Creating new jobs and supporting existing jobs;
- Increasing SMEs financial literacy in business.