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DEPUTY CHAIRMAN OF BOARD OF GUARANTEE FUND AZAMAT KOZHOBAEV PARTICIPATED IN BISHKEK INTERNATIONAL FINANCIAL FORUM 2019
Bishkek International Financial Forum BIFF 2019, organized by the NBKR and the Union of Banks of Kyrgyzstan, took place on May 30-31, 2019 in Bishkek. Azamat Kozhobaev, the Deputy Chairman of the Board of the OJSC “GF”, took part in it. On the first day, the forum was held at the Damas International Hotel, on the second day at the Ethno-complex “Supara-Chunkurchak.”
According to Azamat Kozhobaev, the forum was devoted to the topic “Current trends of the financial market. Challenges and prospects.” At two parallel sessions, topical issues in the field of financial technologies, the green economy development and the digitalization of regions were discussed.
Among the participants are local and foreign representatives of financial and loan institutions, payment organizations, insurance and financial companies, suppliers of banking equipment and IT technologies, independent experts and analysts, etc.
The Deputy Chairman of the Board attended the session on green economy. “As you know, the main goal of the green economy is to ensure economic and investment growth while improving the environment for sustainable development,” said Azamat Kozhobaev. “Therefore, for us, for example, the most important activity is providing access to finance — this is one of the types of support for the transition to the green economy, indicated in the Green Economy Development Program in the Kyrgyz Republic for 2019-2023 of the Ministry of Economy of the Kyrgyz Republic.
The Order of the Government of the Kyrgyz Republic No. 148-p was issued on May 23, 2019, that identified OJSC “Guarantee Fund” as one of the participants in the implementation of the International Development Association (the World Bank) project Integrated Dairy Productivity Improvement. The agreement between the Kyrgyz Republic and the IDA was signed on August 10, 2017. It was ratified by the Law of the Kyrgyz Republic of December 28, 2017, No. 220 (25) and entered into the force on April 10, 2018.
Guarantee Fund reached an agreement with the World Bank on the participation in this project implementation. Now the participation is officially supported by the government order. This demonstrates confidence in Guarantee Fund as a financial institution and recognition of its competence by international organizations and government agencies.
Today, the dairy sector enterprises believe that their main issue is the insufficiency of highly productive dairy breeds, low volumes and milk quality among farmers. They believe that a large-scale, comprehensive work is required in this regard with the involvement of the government agencies, dairy enterprises, farming and business communities.
Therefore, the goal of this project is to enhance dairy animal productivity and milk quality on beneficiary farms in the Issyk-Kul region. It comprises of four components. The first component, strengthening public and private services in the dairy sector will contribute to the program development objective by improving the public-private dialogue on private sector development issues, and by supporting the improvements in the breed stock (genetic quality) of the dairy cows. The second component, on-farm productivity enhancement will work towards the establishment of model dairy villages. The third component, farm-level investments objective is to promote investments in agribusiness, fostering backward and forward linkages in the dairy value chain and support supply chain infrastructure that create higher value. The fourth component, project management will cover the costs associated with project management, including monitoring and evaluation (M and E), and results assessment.
As part of the farm-level investments component, Guarantee Fund will conclude agreements with farmers – members of borrower groups, monitor compliance with the loan repayment schedule, work with problem borrowers and be responsible for the loan repayment.
The total amount of funding is USD 5 million (IDA), of which USD 2.25 million is a grant and USD 2.75 million is a loan. The project implementation period is from April 10, 2018 to December 31, 2020.
The project executive agencies are the Ministry of Agriculture, Food Industry and Melioration of the Kyrgyz Republic and the Ministry of Finance of the Kyrgyz Republic. The project implementing agencies are the Agribusiness Competitiveness Center, the Credit Line Management Department of the Ministry of Finance of the Kyrgyz Republic, and, as it was said, the OJSC “Guarantee Fund”.
Only recently, many Kyrgyz entrepreneurs could not obtain bank loans in full due to the lack of collateral, that forced them to take smaller loan amounts or use expensive borrowed funds of other financial and loan institutions. In the latter two cases, this entailed great difficulties in implementation of business projects.
From the beginning of establishment of OJSC “Guarantee Fund” in 2016, entrepreneurs have a possibility to obtain such a financial instrument as a guarantee.
For two and a half years of practical activity, hundreds of entrepreneurs in all regions of Kyrgyzstan have received guaranteed loans amounting to KGS billions. Thus, from the beginning of its activities and as of May 30, 2019, 845 guarantees were approved in the amount of KGS 1.046 billion. Partner banks approved guaranteed loans in the amount of KGS 3.605 billion.
From the beginning of this year, 189 guarantees were approved in the amount of KGS 291.5 million. Guaranteed loans approved by banks amounted to KGS 853.5 million.
Thanks to guarantees and loans, entrepreneurs implement business plans and contribute to the socio-economic development of the regions. The total contribution to the economy in the amount of KGS 3.6 billion undoubtedly testifies to the correctness of the guarantee system establishment in Kyrgyzstan.