The Program “Financing of Entrepreneurship Entities” was approved

The Program “Financing of Entrepreneurship Entities” was approved. The corresponding resolution was adopted by the Government of the Kyrgyz Republic.

The implementation of this program is aimed at restoring and ensuring economic and social stability, supporting business entities in the context of the spread of coronavirus infection.

Business sectors as priority business sectors for coverage by the Financing of Entrepreneurship Entities Program were identified taking into account the following factors:

– assistance in the preservation of existing and creation of new jobs in the face of an increase in the number of unemployed and the return of labor migrants;

– support for the most economically efficient business areas to form the largest possible contribution to the country’s GDP growth;

– support for business areas that have a multiplier effect on the development of other types of economic activity;

– support for export-oriented enterprises;

– the need to improve the level of food security of the country;

– providing the population and the health care system with protective equipment and the most demanded medicines of domestic production.

 

Within the framework of the Program “Financing of Entrepreneurship Entities”, preferential loan funds will be provided for such areas as:

– tourism;

– light industry;

– pharmaceutical industry;

– freight transportation;

– manufacturing and processing enterprises, including enterprises of the agro-industrial complex;

– manufacturing industry, with the exception of the mining industry.

In order to introduce digitalization of tax administration, preferential loans will be provided to small and medium-sized enterprises that use components of digitalization of tax procedures (electronic invoices, software cash registers, labeling of goods) without restrictions by industry, primarily in services and retail …

In addition, it provides for the refinancing of loans for industrial, processing and processing enterprises and support for small businesses, financing of which is carried out on a non-collateral basis.

Commercial banks and microfinance organizations lend to small businesses on a non-collateral basis without restrictions by industry, with the exception of consumer loans.

Within the framework of the Program “Financing of Entrepreneurship Entities”, the following types of loan products are provided:

  1. Acquisition, renewal, expansion and modernization of fixed assets (for fixed assets).

Lending directions:

– tourism, while lending in the field of tourism does not apply to the restaurant business, with the exception of catering points at tourist facilities (resorts, rest houses, etc.)

– light industry

– pharmaceutical industry

–  freight transportation

– manufacturing and processing enterprises, including agro-industry

– manufacturing industry, with the exception of the mining industry.

Loan conditions:

– amount – up to 30 million KGS

– term – up to 60 months

– interest rate – 6%

– grace period for the principal amount – up to 18 months

– refinancing – no more than 50% of the loan amount.

  1. Purchase of raw materials, components, spare parts (for working capital).

 

Lending directions:

– tourism, while lending in the field of tourism does not apply to the restaurant business, with the exception of catering points at tourist facilities (resorts, rest houses, etc.);

– light industry

– pharmaceutical industry

–  freight transportation

– manufacturing and processing enterprises, including agro-industry

– manufacturing industry, with the exception of the mining industry.

Loan conditions:

– amount – up to 20 million KGS

– term – up to 36 months

– interest rate – 10%

– grace period for the principal amount – up to 12 months

– refinancing – no more than 50% of the loan amount.

  1. Purchase, renewal, expansion and modernization of fixed assets (fixed assets), purchase of goods, raw materials, components, spare parts (working capital) by small and medium-sized enterprises using components of digitalization of tax procedures.

 

Lending directions:

– no industry restrictions.

Loan conditions:

– amount – up to 10 million KGS

– term – up to 36 months

– interest rate – 4%

– grace period for the principal amount – up to 12 months

– full exemption from the repayment of accrued interest – up to 12 months

– refinancing – no more than 50% of the loan amount.

  1. Refinancing of loans to industrial, manufacturing and processing industries, with the exception of the mining industry.

 

Loan conditions:

– amount – up to 20 million KGS

– term – up to 36 months

– interest rate – 11%

– grace period for the principal amount – up to 12 months

  1. Microcrediting on a non-collateral basis  

 

Lending directions:

– no restrictions by industry, except for consumer loans

Loan conditions:

– amount – up to 150 thousand KGS

– term – up to 12 months

– interest rate – 14%

– grace period for the principal amount – up to 3 months

Commercial banks and MFIs are allowed to establish a grace period longer than the period specified in the Program at their own expense.

In case of insufficient collateral from potential borrowers, the latter can apply to the open joint-stock company “Guarantee Fund” with an application for a guarantee. Guarantees are provided to commercial banks and MFIs that have entered into cooperation agreements with the Guarantee Fund.

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