About OJSC “Guarantee Fund”
- Posted by: test
- Category: Digest
One of the important issues of small and medium-sized enterprises (hereinafter SMEs) in the Kyrgyz Republic is limited access to finance. According to research of independent experts from 40% to 50%of potential borrowers, who address banks, cannot obtain loans due to insufficient collateral.
Thereby, OJSC “Guarantee Fund” (OJSC “GF”) with 100% of state share was created by order of the Government of the Kyrgyz Republic to assist entrepreneurs in access to finance. Capital of OJSC “Guarantee Fund” constitutes KGS 282 million of which KGS 210 million was allocated with financial support of Asian Development Bank.
OJSC “Guarantee Fund” was created as an institute for SME support and development by providing access to finance in case of insufficient collateral.
OJSC “Guarantee Fund” carries out its activity on the whole territory of the Kyrgyz Republic and in all sectors of economy. The priority directions for providing guarantees are:
- Production and processing of agricultural products (crop production, fruit-berry and fruit-vegetable clusters, meat-dairy sector, fisheries sector)
- Manufacturing industry (clothing and textile industry, construction materials production and other)
- Services (tourism development, medical services export, transportation services, trade);
- Women’s entrepreneurship support
- “Green” economy support
Special attention is paid to export-oriented and import-substituting enterprises.
The main goal of OJSC “Guarantee Fund” is support for SME financing applications related to:
- creation and modernization of production and processing
- harnessing financial leasing of fixed assets
- creation, modernization and reconstruction of existing import-substituting productions;
- Forming a chain of technologically related and promising export-oriented productions.
A client addresses a bank for loan and in case of insufficient collateral, the bank with the client apply for guarantee of OJSC “Guarantee Fund”.
OJSC “Guarantee Fund” signed cooperation agreement with OJSC “Aiyl Bank”, OJSC “CB Kyrgyzstan”, CJSC “Bank of Asia”, Bank “Kompanion” and Bank “Finca”. In a few days cooperation agreement will be signed with OJSC “RSK Bank”. OJSC “Guarantee Fund” signed another agreement with OJSC “Aiyl Bank” on the priority support for agroprocessing.
Despite the short period of activity, OJSC “Guarantee Fund” has already reached sustainable and profitable activity level. According to results of January 2017, net profit was KGS 645 thousand and on the basis of 2 months (January-February) 2017, net profit will be more than KGS 2 million.
Besides guarantees, OJSC “Guarantee Fund” provides consulting services for entrepreneurs in: 1) business plan development; 2) marketing; 3) entrepreneurs business plan promotion in obtaining loans in banks; 4) holding seminars on entrepreneurs financial literacy in business, business plan development, negotiating with banks and guarantee funds; 6) other entrepreneurship development services.
OJSC “Guarantee Fund” has started its activity since November 1, 2016 and as of February 21, 2017, the following results are achieved:
|№||Economic sector||Number||Guarantee amount||Bank Loan amount|
|1||Tourism||1||600 000||2 000 000|
|2||Manufacturing industry||2||1 153 700||4 354 801|
|3||Services||2||1 650 000||6 150 000|
|4||Agriculture||8||4 796 154||16 641 210|
|5||Trade||3||2 883 650||6 861 850|
|Total||16||11 083 504||
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