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  • OJSC “Guarantee Fund” is a reliable partner for entrepreneurs

    EXPERT OPINION.

    ABDYBALY tegin Suerkul, Honored Economist of the Kyrgyz Republic

    In the conditions of Kyrgyzstan, to turn an idea into a real tool, corresponding to the realities of life, taking into account the needs of the market and meeting the needs of society is not an easy task. Especially it’s rarely in our time when the idea is followed by the adoption of relevant laws and regulations, on the basis of which the necessary development institutions are created, the confidence of the leaders of the country, government and parliament is gained, funds are purposefully being allocated from the state budget to support small and medium enterprises and are effectively and profitably used!

    It should be recognized as an undoubted success, taking into account the dependence of Kyrgyzstan on external borrowing and attracting, in addition to budgetary funds, additional donor funds, the creation of a new development institution using the new financial instrument, which is still missing in our financial and economic system. In our society, due to many problems of growth, weak management, inefficient use of budget funds, distrust of government structures has taken root and the appearance of a successfully operating structure on this background was a pleasant exception.

    The speech is about new structure – guarantee system. The idea of its implementation came 20-25 years ago, but there was no support from government officials and ministers and it was staying unrealized. But the time has come and the leader has come, thanks to whom the development of the guarantee system in Kyrgyzstan has begun. He is a well-known specialist and leader in the financial and banking sphere, Malik-Aidar Barktabasovich Abakirov, goal-oriented, energetic, with brilliant organizational and management skills, who can, as they say, look beyond the horizon.

    Among the banking services, entrepreneurs are primarily attracted by credits. The crediting process is based on the fulfillment of conditions by both parties. The client provides a collateral for the required loan amount. In case of insufficiency of the collateral, banks may request additional collateral.

    In practice, not all borrowers are able to provide sufficient or additional collateral. That leads to the loan denial, or they are forced to take a smaller amount, which makes it difficult for them to implement their business plan. That’s when entrepreneurs come to the aid of guarantee funds which provide guarantees.

    A guarantee system was created to assist entrepreneurs in Kyrgyzstan. With the support of donors and international organizations, the first guarantee funds were established by municipal authorities in different cities and towns of the republic. The experience of the first funds were successful and it was taken as the basis for the creation of Open Joint Stock Company “Guarantee Fund”. It should be noted that in all these processes, including the creation of the first funds, the regulatory framework development including the world experience of guarantee funds, interaction with relevant ministries, work with donors, Malik Abakirov was directly involved and made a great contribution.

    Strenuous efforts to introduce a guarantee system in the country were not spent in vain. In addition to the first funds, other municipal funds appeared, then the Law “On Guarantee Funds in the Kyrgyz Republic” was adopted, the Association of Guarantee Funds was established and in 2016 OJSC “Guarantee Fund” was created. From that moment, the successful development of the guarantee system began, the first in Central Asia, its experience was recognized as successful and was highly praised by international institutions.

    So, within a short time, guarantee funds were able to become a reliable partner for hundreds of entrepreneurs in need for loans, thanks to which they are now successfully implementing their business plans. After all, if there were no guarantees, it would be hard to predict in what kind of situation would be their business!

    OJSC “Guarantee Fund” in fact showed that it is a reliable partner for entrepreneurs, by introducing the way to loans. On the other hand, the fund is also a partner of a number of commercial banks, attracting proven clients to the bank and reducing the degree of credit risks with its guarantees.

    Successful work on the guarantee support for entrepreneurs is also important for the country’s economy, it increases the credibility of the state institutions, serves as an incentive for the development of the small and medium enterprise in almost all spheres and industries. For example, the support for rural entrepreneurs contributes to the development of processing, trade and logistics enterprises and export-import enterprises. That is, besides ensuring the domestic market, conditions are created for the output of Kyrgyzstan’s products to external markets.

    At the same time, the guarantee system needs support from state structures in general and the National Bank of the Kyrgyz Republic in particular. Along with the strengthening of the monetary policy mechanisms, the guarantee system should also receive concrete support.

    The progress achieved in the development of the guarantee system in Kyrgyzstan allows us to hope for the continuation of the successful activity of OJSC “GF” and other guarantee funds for the promotion of entrepreneurs. I would like to wish fruitful work in this direction to all organizations, banks and other institutions involved in the guarantee system!