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  • The chairman of the Management Board of the Guarantee Fund M.-A. Abakirov: “Our Fund has developed its own program to support entrepreneurs in the amount of 1 billion KGS, and has started its implementation in a pilot mode”

    The chairman of the Management Board of the Guarantee Fund M.-A. Abakirov: “Our Fund has developed its own program to support entrepreneurs in the amount of 1 billion KGS, and has started its implementation in a pilot mode”

    Today, on September 7, the Chairman of the Management Board of the Guarantee Fund M.-A. Abakirov gave a press conference on the start of the program implementation developed by the Fund in accordance with the Anti-Crisis Plan of the Government of the Kyrgyz Republic to reduce the negative impact on economic and social stability due to the spread of the coronavirus COVID-19, according to which support will be provided to entrepreneurs in the amount of 14 billion KGS at the initial stage, and subsequently this amount will be increased to 40 billion KGS.

    During the press conference, M.-A. Abakirov spoke about the goals of the program, directions of financing, about the conditions for placing funds on special accounts of partner banks, and also shared the expected results of the program.

    “Within the framework of this program, the Guarantee Fund provides for support of about 1000 entrepreneurs of the country in the amount of 1 billion KGS, and the loan amount issued under our guarantees, according to our forecasts, will exceed 2 billion KGS,” M.-A. Abakirov informed.

    “To date, within the framework of this program, we have already provided more than 10 guarantees for a total amount of over 15 million KGS, the amount of loans exceeded 35 million KGS” – M.-A. Abakirov presented to the attention of the media representatives the information on the progress of the program implementation in a pilot mode.

    The terms and conditions provided in the program are currently very acceptable.

    “The loan amount within the framework of the program is provided for up to 10 million KGS, the term for granting is up to 60 months, and the interest rate should not exceed 10%,” the chairman of the Guarantee Fund said.

    Also at the press conference, information was announced on the activities of the Guarantee Fund following the results of eight months of 2020 and a comparative analysis of indicators for the same period of 2019 was presented.

    So, for eight months of 2020, the Guarantee Fund provided 1,083 guarantees, which exceeded the number of guarantees provided for the eight months of 2019 by 370%. The total amount of issued guarantees amounted to more than 466 million KGS, and the total amount of loans issued under the guarantees of the Guarantee Fund reached almost 2 billion KGS.

    At the end of the conference, M.- A. Abakirov shared information about the activities of the Fund from the beginning of its activities to the present day, according to which, the Guarantee Fund provided support to entrepreneurs, providing almost 2,700 guarantees worth more than 2 billion 142 million KGS, while the amount of loans issued under the guarantees provided exceeded 7.6 billion KGS.

    The President of the Kyrgyz Republic Sooronbai Jeenbekov about the role of the Guarantee Fund in the entrepreneurship development during the interview with the Birinchi Radio

    The President of the Kyrgyz Republic Sooronbai Jeenbekov about the role of the Guarantee Fund in the entrepreneurship development during the interview with the Birinchi Radio

    On September 5, the President Sooronbai Jeenbekov gave another interview to the Birinchi Radio of the Public Television and Radio Broadcasting Corporation, in which he highlighted the activities of the Guarantee Fund, the increase in its authorized capital, and also raised issues that were resolved by the foundation of the Guarantee Fund.

    We present to your attention a part of the interview concerning the activities of the Guarantee Fund, development of the processing industry, export activities and other issues.

    –  You often say that the government supports processing industry within the framework of the regional development. Today you also highlighted that this will contribute to the creation of new jobs. During your recent trip to the Chui region, you said that the country’s dairy industry has the potential to become competitive in foreign markets. How is the work to support the export potential of the country as a whole progressing?

    – I have repeatedly highlighted this before and I will repeat once again: all resources available in the country, including resources from funds and banks, are directed to the development of the processing industry. I was the prime minister, the governor, I am familiarized with many internal problematic issues. Our processing industry did not develop, since for many years the due importance was not given to this issue and sufficient funds were not allocated for this purpose.

    We forward funds not only to agriculture, but also to the processing industry in general, to those who create jobs and those who are engaged in export. The flow of external migration was significantly increased, among other things, because it was impossible to sell the manufactured products. The state cannot purchase all products, but its task is to create conditions for the entrepreneurship development. We provided them with long-term loans at low interest rates and provided tax incentives. We directed resources towards the needs of local entrepreneurs.

    When I was a Prime Minister, the Guarantee Fund was established. For what purpose? We have a lot of entrepreneurs who have good ideas and projects. There are many of them in the countryside. But funds are needed to implement them. Banks provide loans for a period of two to three years and at a 20% rate. Even if they want to receive such a loan, they do not have the corresponding collateral. Therefore, they fail to start their own business. To solve this problem, the state created a Guarantee Fund and increased its authorized capital. The number of those who receive assistance from the Fund is increasing. The Fund acts as a guarantor for entrepreneurs who do not have collateral. Thus, we managed to resolve many issues that have been accumulating over the years.

    Let me give you an example. In 2016, when I was a prime minister, I visited the Talas region. And I was very upset to see that the products of the milk processing plant were not sold and stand idle in warehouses. If the plant is suspended, farmers will not be able to sell the milk they produce, because these issues are closely interrelated. If the plant sells its products at the proper level, it will have profit, funds to buy milk from the villagers. And if this is not the case, then farmers will also suffer, who will have nowhere to hand over their products.

    To improve the situation, we built new laboratories that meet the EurAsEC standards and renovated old ones. Funds were allocated for phytosanitary and veterinary laboratories, which were made with modern equipment. It should be noted that Russia has well supported our efforts in this direction. We have built laboratories that meet international standards, received an export permit, and now our dairy products are freely exported for sale outside the country. Currently, 13 companies have the ability to supply milk powder to China.

    There should be no significant problems in this area, since our dairy products are competitive in foreign markets due to their environmental friendliness and quality.

    I recently visited the Naryn region and was pleased with what I saw. The Russian-Kyrgyz Fund, the Guarantee Fund and Aiyl bank provide long-term loans to dairy enterprises. As soon as the Kochkor dairy plant is put into operation next year, the problem of purchasing milk from the population of the Naryn region will be resolved. Our goal is to revive the processing of milk, meat, leather and wool produced in Kyrgyzstan by creating appropriate conditions for entrepreneurs.

    Our task, I repeat, is to support entrepreneurs with long-term loans at low interest rates, provide them with tax incentives, and help them export. This process has already started and is gaining momentum.

    Everywhere I demand the fulfillment of these tasks and all government agencies, all financial institutions are aware of this. I say that it is necessary to provide funds to entrepreneurs regardless of what they intend to process. Indeed, through the activities of enterprises, jobs are created. They will pay wages to workers, pay taxes to the local budget. The volume of tax revenues will increase, money will appear for road repairs, salaries of teachers and doctors will be increased. Social services by the state will also improve. All this is related to the availability of funds. Everything is interconnected. And we managed to give impetus to this process.