A working meeting was held recently in the Government of the Kyrgyz Republic on the implementation of the first sub-program of the Economic Diversification Promotion Program, supported by the ADB. The Chairman of the Management Board of OJSC “Guarantee Fund”, Malik Abakirov, participated in it.
As previously reported, the ADB approved a grant based on an action policy of 50 million KGS for the first sub-program of the Economic Diversification Promotion Program, which supports the efforts of the Kyrgyz government to diversify the economy through reforms. There will be two such sub-programs – in 2019 and 2021 (each worth 50 million USD).
On October 21, 2019, Jogorku Kenesh Committee on Budget and Finance approved a bill on ratification of a grant from ADB in amount of 50 million USD for the first sub-program of the Economic Diversification Promotion Program.
The program supports the efforts of the government of the republic to implement four priority areas for reform of the National Strategy for Sustainable Development for 2018-2040: improving the country’s trade and investment competitiveness, developing SMEs, promoting public-private partnerships, and developing skills related to the needs of industries.
According to the Chairman of the Management Board of OJSC “Guarantee Fund”, who participated in the meeting, he had previously met with ADB national consultant Kylych Dzhakypov and ADB representative Tony Daza. The issues of supporting SMEs, the successes achieved and the ways of further reforming of OJSC “Guarantee Fund” were discussed.
“With regard to the participation of OJSC “Guarantee Fund” in the implementation of the sub-program of the Economic Diversification Program in the development of SMEs, we offer a number of initiatives, including the establishment of the Institute for the Development of SMEs on the basis of OJSC “Guarantee Fund”, in conjunction with which the Bank should be opened to finance SMEs.
OJSC “Guarantee Fund” also plans to create a private equity fund, as yet another area of reform in support of entrepreneurship.
In addition, there are strategic plans for the enlargement of enterprises, that is, to facilitate the development of small enterprises into medium-sized, and medium-sized enterprises into large ones. Then, in the next 5 years, the fund plans to bring 50 enterprises of Kyrgyzstan to the level of the largest companies in Kyrgyzstan, using the possibilities of entering the capital, joint management of the enterprise.
The fund is confident that the cooperation between ADB and the Government of the Kyrgyz Republic will contribute to the growth of the country’s economy. OJSC “Guarantee Fund” will continue to provide comprehensive support to SMEs.
World Bank Project.
OJSC “Guarantee Fund”, as a participant in the implementation of the World Bank Project “Integrated Dairy Productivity Improvement”, conducts a survey of farm households in Issyk-Kul region, and arranges loans.
This time, the specialist of Guarantee and Product Development Department of OJSC “Guarantee Fund”, Sanjar Akmatov, visited Zhyluu-Bulak village, Tyup district, An-Oston and Ak-Dobo village of Jeti-Oguz district, where 81 households, in total, were examined.
As we previously reported, OJSC “Guarantee Fund” participates in process of selection of applicants, conducts farm surveys and ensures the execution of loan agreements with farmers – members of borrower groups.
When examining farms, attention is drawn to absence of debt on loans, the availability of land with an area of no more than five hectares, the presence of cattle, no more than 3. Borrowers must also make their own contribution in 10% of the loan amount. It is important to keep up with the following proportions:
- At least 45% of direct beneficiaries should be women;
- At least 10% of direct beneficiaries should be young adults (18-29 y.o.)
Loans are interest-free, issued in amount of up to 1200 USD per person (84 thousand KGS), and for a period of 10 months to 3 years.
Seminars in Regions.
From October 23 to 30, 2019, an employee of OJSC “Guarantee Fund” Saparbay uuly Altynbek, with the company of regional representative Adilet Alimzhanov, conducted seminars for employees of branches of partner banks in four districts of Osh region – Kara-Suu, Uzgen, Kara-Kuldzha, and Alai.
During the meetings, the mechanisms of providing guarantees were discussed, as well as the interaction between the employees of OJSC “Guarantee Fund” and loan specialists of partner banks. The following issues were considered:
- Increase in the availability period for credit lines with the participation of the Fund;
- Decrease in the commission of the Fund for priority sectors;
- Lack of access to external email from partner banks;
- Reducing the number of documents for consideration of a guarantee;
- Changes to the guarantee application form.
Employees of OJSC “Guarantee Fund” handed over information brochures, booklets, posters to bank branches, provided sample documents for obtaining guarantees (application forms, guarantee contract templates, guarantee letter templates, presentations, etc.)
74 employees, in total, from 20 bank branches participated in the seminars on the topic “Mechanisms of providing guarantees”.
At the end of the meetings, the employees of OJSC “Guarantee Fund” reminded the participants of the seminars about the incentive campaign conducted by OJSC “Guarantee Fund” for loan officers of the regional branches of partner banks involved in issuance of loans under a guarantee of the Fund. The winners will be those who issue more loans under guarantees, in terms of quantity and amount. The Fund staff reminded and encouraged to actively participate in the process.
Projects for Region Development.
On November 6, 2019, the regular meeting of the Competition Commission on selection of investment business projects, infrastructure projects, and development programs was held. The meeting was attended by the Chairman of the Management Board of OJSC “Guarantee Fund”, Malik Abakirov, and the Head of the Consulting Services Department, Marat Urustemov.
39 business projects from Batken, Talas, Osh, Chui, and Jalal-Abad regions, for total amount of more than 600 million KGS, were submitted to the Competition Commission for consideration. As a result of the discussion, 19 projects were approved for a total amount of 155.459 million KGS in the framework of 2 billion KGS allocated from the republican budget for regional development.
Projects from Batken, Osh regions were represented by Governor Akram Madumarov. 23 projects were submitted, a number of them were approved by the Commission, including one of two projects prepared with the participation of OJSC “Guarantee Fund”. The selected project is focused on fishery in Isfana city.
When discussing this draft, clarifications were given to members of the Tender Committee by the Chairman of the Management Board of OJSC “Guarantee Fund”, Malik Abakirov.
Ways to Improve Financial Literacy.
On October 29, 2019, a financial fair was held in Bishkek Park Mall as a part of the State program for increasing the financial literacy of the population of the Kyrgyz Republic. The fair was organized by the State Financial Supervision Service in conjunction with the financial and insurance companies of Bishkek.
The fair was attended by the head of Guarantee and Product Development Department of OJSC “Guarantee Fund”, Erik Talasbaev. During the event, he informed about the activities of OJSC “Guarantee Fund” in assisting SMEs, the development of a guarantee system in Kyrgyzstan, and talked about the specific conditions for obtaining guarantees.
As part of the financial fair, a presentation of financial products was held, including banking, microfinance, insurance, investment companies, independent financial literacy consultants, and the game “Savings” aimed at developing financial literacy skills among the population.
32 financial institutions attended the fair, including microfinance organizations, insurance companies and others. The participants visited the financial services exhibition, got acquainted with the conditions for their receipt, and also received independent advice on regional family budget management, financial planning and the rational use of financial services.
Given the high interest of financial institutions and visitors, it is projected to organize such fairs on an annual basis.
Cooperation with Partner-Banks.
On November 5, 2019, the Deputy Chairman of the Management Board of OJSC “Guarantee Fund”, Azamat Kozhobaev, met with the management and employees of the branches of partner banks located in Sokuluk and Moskovskiy districts.
The meetings discussed issues of guarantee support for SMEs and intensification of issuance of loans under the guarantee of OJSC “Guarantee Fund”. An exchange of views on the development of entrepreneurship in these areas also participated.
Azamat Kozhobaev and Denizbek Raimkulov, specialist of the Regional Development Department of OJSC “Guarantee Fund”, who accompanied him on a business trip, presented a line of guarantee products intended for small, medium and large entrepreneurs, and also reported that new products are being developed which are aimed at developing regions and supporting local entrepreneurs.
Practical recommendations were also provided on enhancing the issuance of loans under guarantees by loan officers of banks.
The meetings were held at the branches of partner banks, “Ayil Bank”, “CB Kyrgyzstan”, “RSK Bank”, “FINKA Bank”, “KICB”, and “Optima Bank”.