OJSC “Guarantee Fund” and The State Agency for Investment and Export Promotion signed Memorandum on cooperation
On July 14, 2017 OJSC “Guarantee Fund” and The State Agency for Investment and Export Promotion under the Ministry of Economy of the Kyrgyz Republic signed Memorandum on cooperation
After the signing the Chairman of the Board of OJSC “GF” Malik Abakirov noted: “Our cooperation is aimed at assisting entrepreneurs in access to financing, attracting investments and providing guarantees. One of the priority issues for OJSC “Guarantee Fund” and The State Agency for Investment and Export Promotion is financial support for export-oriented and import-substituting enterprises.
We can say that this Memorandum is a real step towards realization of the Order of the Government of the KR from July 4, 2017 No 272-r, according to which OJSC “GF” and The State Agency for Investment and Export Promotion will contribute export-oriented and import-substituting enterprises in access to financing”.
According to OJSC “GF” data for 6 months of 2017 export-oriented and import-substituting enterprises were provided with 19 guarantees, that is 21% of the total number of guarantees. Support for these enterprises is one of the priority objectives of our Fund.
We would like also note that activity of OJSC “GF” is not limited by guarantee issue. Now our employees of the Fund consult entrepreneurs on business planning, hold training seminars for them and all representatives involved in SME support in the capital and regions. A big attention is paid to women entrepreneurship support.”
Management of the Fund has recently announced its plans on opening a training center under the Association of Guarantee Funds for increasing financial literacy of entrepreneurs, designing business plans, business administration considering potential risks.
This training center will suggest a broad range of courses and seminars on management, marketing, accounting. The relevant part of this training will be improving leadership and communicative skills of entrepreneurs.
“But it will be a little later, – said Malik Abakirov, – at the moment OJSC “GF” assists in promoting business projects of attendees of seminars, i.e. employees of the Fund assist in designing business plans and realizing it at all development stages: business administration, addressing partner banks for loans and if necessary providing guarantees.
Such an approach, by the way, in fact does not occur in the sphere of SME. Usually miscellaneous centers and funds are limited by issuance of certificates to attendees but do not provide real support for business promotion.
Another new update of OJSC “GF” is information product – “Commercial banks rating”, which is prepared monthly by specialists of the Fund based on financial statements of banks. “As we strive to attract banks as partners, then deep analyzing of the banking system indicators is a necessary condition for us. That’s why we make a monthly rating based on many parameters of each bank’s activity.
We are planning to disseminate rating results through leading mass media on a free base to
make as many readers as possible acquaint with essential banking indicators. It is our contribution to financial literacy increase of population,” – concluded Malik Abakirov.
On July 12 OJSC “Guarantee Fund” established its next achievement in its activity: the volume of issued guarantees to Kyrgyz entrepreneurs passed 100 million mark and constituted KGS 102,6 m! The number of guarantees as of July 12 constituted 88, they were issued to enterprises of manufacturing, agriculture, agro-processing, clothing, textile, tourism, export-directed and import-substituting enterprises.
Only recently the Chairman of the Board of OJSC “GF” Malik Abakirov held a press conference for Mass Media on results of the first half of 2017. At that moment 84 guarantees were issued in the amount of KGS 93,4 m.
Malik Abakirov commented on this: “The success is not accidental. It has come due to close cooperation between the state company, partner banks and representatives of SMEs.
Concerning partner banks, Aiyl Bank, RSK Bank, CB Kyrgyzstan, Bank of Asia, Finca Bank, Bank Companion and Demir Bank have in total 180 branches, that is 56% of the branch network of all commercial banks of Kyrgyztsan. The doors of these branches are open to our entrepreneurs. Potential of SMEs – our customers – is large. We assist them by providing guarantees.
I would like also emphasize good teamwork of my staff who are very responsible, professional and creative.
Performance indicators of OJSC “GF” demonstrate stable growth, increase of qualitative and quantitative indicators. Support for SMEs contribute not only to business development but economy as a whole as it increases production, develops services sphere and infrastructure. If to speak about social relevance, then it should be noted that it contributes to creation of new jobs, support for existing jobs and allocation of payments and tax to budget.
Such a financial instrument as guarantees attract businessmen. On average during a month 20-30 applications are received. There is a growth of women entrepreneurship in total number of guarantees. Almost a third of guarantees are provided to product exporters and importers.
Today activity of OJSC “GF” is characterized as targeted and consistent, successful and profitable. For information, the volume of net profit for 6 months of 2017 constituted KGS 7 m.
One of the priority objectives of the state company, as noted Malik Abakirov, is also attracting internal and external investments. Specific measures are taken on this issue.
In one word, the state company has a large potential and we will witness major achievements in this sphere again and again.
Press release of OJSC “Guarantee Fund” from July 4, 2017
Chairman of the Board of OJSC “GF” Malik Abakirov summarized results of the first half of 2017
On July 4, 2017 OJSC “Guarantee Fund” (OJSC “GF”) held a press conference on “Results of OJSC “GF”” activity on assistance in entrepreneurship development in Kyrgyzstan for the first half of 2017”.
The chairman of the Board of OJSC “GF” Malik Abakirov addressed the journalists of leading mass media of the Kyrgyz Republic.
OJSC “GF” today executes relevant socio-economic objective, assisting SMEs, – said Malik Abakirov – contributing them in realization of business plans, increasing employment and allocation of payments and tax into budget and developing infrastructure.
According to the Chairman, OJSC “Guarantee Fund” demonstrates steady and progressive development. Every month the number of guarantee recipients increases, on average per month there are 20-30 applications from entrepreneurs. Guarantees are also provided for women entrepreneurship support, the share of which to the total volume of provided guarantees constitutes almost 50%.
More than a third of the total number of guarantees are provided for enterprises of export and import. The net profit of the state company for 6 months of 2017 constituted KGS 7 m.
Thus, as of June 30, 84 guarantees in the total amount of KGS 93,4 m were approved.
Information on guarantees issued by sectors: entrepreneurs involved in agriculture were provided with 32 guarantees in the amount of KGS 13,4 m (loans, obtained by entrepreneurs in banks, constituted KGS 39,7 m or 12% of the total volume).
Entrepreneurs in production sphere obtained 11 guarantees in the amount of KGS 27,5 m, total bank loan amount constituted KGS 133,7 m (41%).
To support trade infrastructure 22 guarantees were issued in the amount of KGS 28,8 m; bank loan amount constituted KGS 78,1 m (24%).
In the sphere of tourism 5 guarantees are issued in the amount of KGS 6,5 m and bank loan in the amount of 16,9 m (5%).
In the sphere of transportation and storage 6 guarantees are issued in the amount of KGS 6,4 m and bank loan in the amount of KGS 17 m (5%).
In the sphere of agro processing 4 guarantees are issued in the amount of KGS 1,7 m and bank loans in the amount of KGS 4,9 m (1%).
In the sphere of services 2 guarantees are issued in the amount of KGS 4,3 m and bank loans in the amount of KGS 9,6 m (3%)
In the sphere of infrastructure 1 guarantee is issued in the amount of KGS 2,9 m and bank loans in the amount of KGS 25,3 m (8%).
In the sphere of health infrastructure 1 guarantee is issued in the amount of KGS 1,9 m and bank loan in the amount of KGS 4,8 m (1%).
For women entrepreneurship the total volume of provided guarantees constituted 40%, this sector has provided 38 guarantees. Including 10 guarantees in the total amount of KGS 19,5 m (21%) are provided to import- and export-directed enterprises.
Number of created jobs constituted 304, supported 781 existing jobs.
Share of guarantees to GDP constituted 0,05%. Share of issued loans under guarantees to the total loan portfolio of the banking system constituted 0,32%.
The average term of guarantees is 1,5 year, the average guarantee amount – KGS 1,1 m.
Number of guarantees issued by regions
As of June 30, guarantees are issued: in Bishkek – 25 (30% of the total number), Chui region – 16 (19%), Osh region – 11 (13%), Batken region – 10 (12%), Naryn region – 10 (12%), Issyk – Kul region – 7 (8%), Jalal-Abad region – 5(6%).
Volume of issued guarantees by regions in KGS million
Bishkek – 53 (57% of the total volume), Chui region – 18 (19%), Osh region – 6 (6%), Batken region – 4 (4%), Naryn region – 3 (3%), Issyk – Kul region – 7 (7%), Jalal-Abad region – 3 (3%).
Number of issued guarantees by business type
Medium business – 24 (29% of the total number of guarantees), small medium – 22 (26%), medium business — 23 (27%), large business – 15 (18%).
Partner banks of OJSC “GF” are OJSC “Aiyl Bank”, OJSC “RSK Bank”, OJSC CB “Kyrgyzstan”, CJSC “Bank of Asia”, CJSC “Finca Bank”, CJSC “Bank Kompanion” and CJSC “Demir Bank”.
The above banks have in total 180 branches; it is 56% of the branch network of all commercial banks of Kyrgyzstan. As of June 30, more than 50% of partner bank branches participated in issuing loans secured partially by guarantees to SMEs.
As the statistics shows, every month the number of guarantee applications increases by an average of 20-30 units. If as of June 1, thirty branches participated, then as of June 30, almost forty branches did. It proves access extension to financial guarantees, production increase in general and further SMEs growth.
Issued loans statistics
The highest results were demonstrated by the following banks: OJSC “RSK Bank” issued 3 loans in the amount of KGS 104,7 m (32% of the total volume), 3 guarantees were approved by OJSC “GF” in the amount of KGS 11,6 million; CJSC “Bank of Asia” – amount of issued loans constituted KGS 88,5 m (27%), number of guarantees – 23, guarantee amount – KGS 34,8 m; OJSC CB “Kyrgyzstan” – loan amount – KGS 76 m (23%), number of guarantees – 12, guarantee amount – KGS 24,9 m; OJSC “Aiyl Bank” – loan amount – KGS 45,5 m (14%), number of guarantees – 39, guarantee amount – KGS 17 m; CJSC “Bank Kompanion” – loan amount – KGS 12,1 m (4%), number of guarantees – 4, guarantee amount – KGS 3,9 m. CJSC “Finca Bank” issued loans in the amount of KGS 3,5 m (1%), number of guarantees – 3, guarantee amount – KGS 1,2 m.
Presentation of new product of OJSC “GF” – “Commercial banks rating in Kyrgyzstan” was held. It was presented by risk manager Reina Kurmankozhoeva. The presentation will help to acquire information on activity of banks, make simple comparative analysis and increase financial literacy.
The chairman of the Board of OJSC “GF” Malik Abakirov emphasized the relevance of financial literacy among SME entrepreneurs. He reported that soon the seminar within the ADB project “Women entrepreneurship development” would take place. Attendees of the seminar representing small and medium enterprises will not only acquire theoretical knowledge but will design business plans that will be realized with the help of employees of the Fund. OJSC “GF” will provide real concrete support for entrepreneurs. Thus, employees of the Fund will assist them starting from designing business plan till addressing banks for loan and provide guarantee if necessary.
At the end of conference employees of OJSC “Guarantee Fund” and Mass Media representatives discussed the next press tour – a visit to enterprise – guarantee recipient. The enterprise of agro processing in Shopokov city is supposed to be the next place of visit.
All necessary information about OJSC “Guarantee Fund”, its aims and objectives, issued guarantees, guarantee conditions for SMEs you can find on our website www.gf.kg.
Contact information: 66-49-60, 62-53-74, e-mail: email@example.com
OJSC “Guarantee Fund” was created in 2016 by the Government of the KR to assist entrepreneurs in obtaining loans in the necessary amount in case of insufficient collateral.
Capital of OJSC “GF” constitutes KGS 282 m, KGS 72 m was allocated from the republican budget and KGS 3 m is financial support of ADB (KGS 210 m).
The priority sectors for providing guarantee are 1) production of different types of products; 2) agriculture and agro-processing; 3) clothing and textile production; 4) tourism; 5) export-oriented and import-substituting enterprises; 6) other.
Ceiling on guarantee is not more than 10% of the capital of OJSC “GF” and not more than 50% of the loan amount.
Partner banks of OJSC “GF” are OJSC “Aiyl Bank”, OJSC “RSK Bank”, OJSC CB “Kyrgyzstan”, CJSC “Bank of Asia”, CJSC “Finca Bank”, CJSC “Bank Kompanion”, CJSC “Demir Bank”.
The legislative basis for Guarantee Funds is the Law on “Guarantee Funds of the Kyrgyz Republic” which determines operating conditions for Guarantee Funds. For developing guarantee funds system the Government of the KR approved Development Concept for Guarantee Funds until 2020.
On the territory of the Kyrgyz Republic 6 guarantee funds operate in 4 regions (Kara-Balta city, Karakol city, Osh city, Jalal-Abad city, Kant city and Sarai Aiyl Okmotu of Osh region).
OJSC “Guarantee Fund”