SUPPORT OF REGIONAL ENTREPRENEURS – PRIORIY AREA OF OJSC “GUARANTEE FUND”
In the Year of Regional Development, Digitalization of the country and Child Support, OJSC “Guarantee Fund” carries out diverse creative activities to assist SMEs of the republic, providing them with guarantees for obtaining loans.
The activities of OJSC “Guarantee Fund” contribute to the implementation of SME business plans, employment, reduction of migration, infrastructure and socio-economic development of the regions as a whole.
Key Performance Results for 4 months of 2020
- The equity of OJSC “Guarantee Fund” increased from 1.205 billion KGS to 1.225 billion KGS, increase of 102%.
- 593 guarantees were issued which is 412% more than for 4 months of 2019.
- 98% of guarantees were issued to the regions.
- The sum of guarantees amounted to 204 million KGS, which is 91% compared to 4 months of 2019.
- Net profit amounted to 20 million KGS, which is 183% more than in 4 months of 2019.
- From 167% to 300% more guarantees in quantity were in issued, taking into account all regions, than in 4 months of 2019.
- The amount of guarantees issued from 100% to 117% more than for 4months of 2019, taking into account all regions.
Within the framework of the execution of the Decree of President, S. Zheenbekov, on declaring 2020 – the Year of Regional Development, Digitalization of the Country and Child Support, OJSC “Guarantee Fund” from the start of this year, and as of April 30, 2020 issued 593 guarantees in the amount of 204 million KGS, partner banks issued loans worth 1.1 billion KGS. It should be noted that 98% of guarantees were issued to the regions. From year to year, guarantees demonstrate an increase in quantitative and qualitative parameters.
OJSC “Guarantee Fund” contributes to the reduction of migration, to the reduction of poverty, to the provision of employment for the residents of the regions. Due to the guarantee support of entrepreneurs, in total, 172 (2585 from 2016) new jobs were created in the republic for 4 months of 2020, 1392 (11 854 from 2016) existing jobs were supported.
Women entrepreneurs received 203 guarantees in the amount of 62 million KGS. The share of women entrepreneurship in the total number of guarantees provide was 34 percent.
As of April 30, 2020, two export-oriented projects received a total of 23 million KGS worth of guarantees.
OJSC “Guarantee Fund”, taking into account the current economic situation in the country, in order to support SMEs – guarantors, approved the restructuring of 140 guarantees in the amount of 165 million KGS. We will continue to support entrepreneurs.
OJSC “Guarantee Fund” continues the implementation of two cluster projects:
- “Financing of the dairy sector in Issyk-Kul region” (World Bank project). The goal of the project is to provide farmers with funds for the purchase of cows and they are paid with a loan by selling milk. In total, loans were issued to 913 farmers in amount of 65 million KGS, and they provide an additional 12 to 15 tons of milk to dairy enterprises every day.
- “Intensive Sheep Husbandry”. Soon, we will begin implementation, the coronavirus temporality suspended the implementation of the program “One District – One Enterprise”, which provides a great socio-economic effect.
- Within the framework of the program “One District – One Enterprise”, as of April 30,2020, guarantee support was provided to 48 projects in the amount of 172 million KGS, the volume of loans under guarantees amounted to 534 million KGS.
Over the 4 months of 2020, the specialists of OJSC “Guarantee Fund” trained employees of partner banks on the mechanisms for providing guarantees, with insufficient collateral for 181 loan officers. And also, in all regions of the country, 18 seminars for entrepreneurs and bankers were held. They were attended by 40 bank employees and 546 entrepreneurs.
It is worth to note that the need for SMEs in guarantees is 40-50% of the loan portfolio of the banking system, this requires an increase in the capitalization of OJSC “Guarantee Fund” and, on the proposal of the NBKR, a decision is being prepared to increase the authorized capital of OJSC “Guarantee Fund” by another 1 billion KGS.
Currently, the Government of the Kyrgyz Republic, together with international financial organizations (the World Bank, ADB, IFC, and others) is developing SME support programs and within them, Guarantee Fund” will use its assets and attract funds from these donors.