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  • ACTUAL TOPIC OF DEVELOPMENT OF REGIONS WERE DISCUSSED AT SEMINAR OF THE SCO INTERNATIONAL ASSOCIATION

    International Seminar.

    In period between October 22 to 25, the seminar of the Interbank Association of the Shanghai Cooperation Organization on topic “Experience in Financing Regional Development Projects” was held in Rixon Hotel, Bishkek. Representatives of the Development Bank of Kazakhstan, Amonat Bank of Tajikistan, and the EEF of the Russian Federation participated in it.

    The seminar was also attended by the Chairman of the Management Board of OSJC “Guarantee Fund”, Malik Abakirov. He familiarized attendants about the experience of the Fund’s cooperation with SMEs of the republic in providing guarantees and disseminating the Kyrgyz model of guarantee funds to foreign countries.

    Malik Abakirov spoke about the prerequisites for creating a guarantee system in Kyrgyzstan, caused by the necessity to provide assistance to SMEs in access to financial resources. The number of SMEs is more than 800 thousand units, and lending to the business sector is only 22% of the Kyrgyz Republic’s GDP, while in OECD countries, the percentage is 100-300 percent of GDP.

    Moreover, SMEs have limited access to finance due to bank’s stringent requirements for collateral and high interest rates. In general, the need for guarantees by SMEs is estimated at 40% of the total loan portfolio of banks.

    To resolve these problems, a new financial system was created in 2011-2013 – regional guarantee funds. In 2016, the Government of the Kyrgyz Republic established OJSC “Guarantee Fund” with the assistance of ADB, operating throughout the country. As a result, a two-level Kyrgyz model of guarantee funds was created; OJSC “Guarantee Fund” and six regional guarantee funds. The system was highly praised by ADB. Significant events took place in 2019: the amendment of the Law “On guarantee funds in the Kyrgyz Republic” was adopted, the Government of the Kyrgyz Republic actualized additional capitalization of the fund, and the National Bank of the Kyrgyz Republic became one of the shareholders. As a result, the authorizes capital of the fund was increased up to 1.132 billion KGS.

    Over the past year, OJSC “Guarantee Fund” has truly become a development institution, the Chairman of the Management Board further emphasized. Not only does the fund provide guarantees, but it also provides a package of services for SMEs – it conducts consultations, seminars for regional entrepreneurs and bank employees, assists in developing business plans, and participates in enterprise management.

    Since the inception of the fund’s activity, representative offices have been created in all areas. The first branch was opened in September in Naryn region. It is projected to open branches in Jalal-Abad and Issyk-Kul regions, which will increase the coverage of guarantees and services of local entrepreneurs.

    As of September 30, 2019, in total of 980 entrepreneurs received guarantees worth over 1.3 billion KGS, Malik Abakirov declared. Under these guarantees, entrepreneurs received over 4.6 billion KGS from partner banks, and now are successfully implementing their business projects, contributing to the development of regions, providing employment for the population, helping to reduce poverty and reduce migration.

    A separate topic of the report of the head of the fund was the issue of export of the Kyrgyz Model of the guarantee funds. Particularly, a guarantee fund in Tajikistan, using the Kyrgyz model, was created and started functioning. More, Uzbekistan and Belarus expressed interest in the Kyrgyz Model of guarantee funds.

    As for the development prospects, Malik Abakirov informed that in the future, it is possible to transform OJSC “Guarantee Fund” into Guarantee Fund Corporation for the development of SMEs. There are also proposals to create a Central Asian Guarantee Fund to support SMEs in Central Asia and the Caucasus. The implementation of this idea will contribute to increasing the level of mutual trade between the SMEs of these countries, Malik Abakirov concluded.

    PR/Temirbek Mamatkanov/ 01.11.2019

    “EXTEND THE ENTREPRENEURUAL REACH WITH GUARANTEE SUPPORT”

    Meetings in Regions.

    “EXTEND THE ENTREPRENEURUAL REACH WITH GUARANTEE SUPPORT” – was the topic of meetings of the Deputy Chairman of the Management Board of OJSC “Guarantee Fund”, Azamat Kozhobaev, which he held from October 22 to 25, 2019 in Osh Region.

    During a visit to Osh region, Azamat Kozhobaev net with the leaders and employees of the local branches of partner banks, which have been actively cooperating with OJSC “Guarantee Fund” for several years. The parties discussed important issues of cooperation in support and development of SMEs, as well as mechanisms for cooperation in issuance of loans under guarantees of OJSC “Guarantee Fund”.

    Another purpose of the trip of the Deputy Chairman of the Management Board was organizational activities related to the upcoming opening of a branch of OJSC ‘Guarantee Fund” in Osh region.

    It should be noted that the Osh regional branch of OJSC “Guarantee Fund” will be empowered to independently approve and issue guarantees to a business entity in the amount of up to 300 thousand KGS. This will significantly accelerate the process of interaction between the branch of OJSC “Guarantee Fund” and the regional branches of partner banks, and will also expand the coverage of entrepreneurs with guarantee support.