Expert opinion


| Jan 25, 2021 | Expert opinion

Expert opinion.

Anvar Abdraev, President of the Union of Banks of Kyrgyzstan.

The appearance of guarantee funds in Kyrgyzstan stimulated the activity of small and medium-sized businesses, promoted the implementation of their business projects, the development of production, and the expansion of production volumes.

The funds began to satisfy the needs of business in the required amounts of credit resources, providing banks with financial guarantees for the missing part of the collateral. It should be noted that banks, represented by guarantee funds, receive support in the form of reducing credit risks.

Separately, I would like to emphasize the role of the Guarantee Fund OJSC in promoting the guarantee system and supporting entrepreneurship. Since its inception, the company has been demonstrating a good pace of development, the indicators of guarantees provided, amounts of guarantees and loans, and profits are constantly growing. Branches of the company operate in all regions. It should also be noted that the company has made a great contribution to the implementation of government programs for financing small and medium-sized businesses.

Being a shareholder of the National Bank of the Kyrgyz Republic, capitalization of the company testifies to confidence in the “Guarantee Fund” as a development institution. Today OJSC “Guarantee Fund” is a part of the banking system, which imposes on it a special responsibility to shareholders, customers and partners.

Since 2020, the company is a member of the Union of Banks of Kyrgyzstan. We are delighted to welcome such a successful financial company to our ranks.

The country’s banking system jointly solves all acute economic challenges of today. And on a par with banks, OJSC “Guarantee Fund” makes a significant contribution to their decision.

by | Apr 8, 2020 | Expert opinion

Expert Opinion.

Y. Abdurasulov, PhD of agriculture sciences, the President of “Kyrgyz-Et” Association.

OJSC “Guarantee Fund” has become a new phenomenon in the economic sphere of Kyrgyzstan. At first, many, both in the business sphere and in government bodies, did not believe that OJSC “Guarantee Fund” could successfully earn money. But it took place, earned, and earned quite successfully, gaining momentum every year.

The main task of OJSC “Guarantee Fund”, as you know, is to guarantee part of the entrepreneur’s pledge to obtain the required amount of a bank loan. Today, numerous entrepreneurs use its services and their number is increasing every year. OJSC “Guarantee Fund” gave a good impetus to business development in Kyrgyzstan. We must pay tribute to the founder and head of OJSC “Guarantee Fund”, Malik Abakirov, who in a short time managed to make the fund one of the country’s successful and efficient economic structures.

The management of OJSC “Guarantee Fund” does not stand still, along with entrepreneurs, with government agencies, with banking structure, develops and offers all new product lines for entrepreneurs and farmers of the county. Today, OJSC “Guarantee Fund” has developed and is implementing large-scale business projects in industry, processing industry, agriculture and other sectors of the country’s economy.

As an example, we can cite a project developed by OJSC “Guarantee Fund” on the development of intensive sheep husbandry in Kyrgyzstan. Livestock is the leading sector of the entire economy of Kyrgyzstan. The income-generating livestock industry is the meat industry. In the gross agricultural product, in monetary terms, meat industry accounts for 35% – more than one third.

The implementation of this project will have the strongest multiplier effect, tens of thousands of new jobs will appear, the processing industry will develop, the export potential of thee industry and the whole country will increase (today the whole world knows that high-quality and environmentally friendly food products are being produced in Kyrgyzstan, becoming brad of the country for which demand is growing every day).

Incomes will increase, especially for residents of rural communities, including in the high mountainous and inaccessible regions of the country, where livestock farming is the only type of employment and income generation, migrants will return. In a comprehensive plan, this will become the key to the successful implementation of the Decree of the President of the Country on the development of regions.

Qualified, modern and educated people work at OJSC “Guarantee Fund”. Today, they provide the business sector not only with low-interest collateral financial resources, but also provide a full range of services for the country’s business sector – training, consulting, assistance in developing business projects and their support.

The services of OJSC “Guarantee Fund”, which is important, are available in all regions of the country. To do this, regional representative offices are opened, branches operate in Naryn and Osh regions. This allows OJSC “Guarantee Fund” to expand the reach of entrepreneurs and provide them with all kinds of support on places.

Business Ombudsman Institution may appear in Kyrgyzstan
by | Dec 31, 2018 | Expert opinion

Expert opinion.

 “For the timely and targeted protection of business interests, it is planned to introduce a business ombudsman institution,” said the Prime Minister Muhammedkaliy Abylgaziev on June 28 of this year, speaking at the next meeting of the Business Development and Investments Council under the Government of the Kyrgyz Republic.

We asked Gulnara Uskenbaeva, the President of the Suppliers Association of the Kyrgyz Republic, a member of the Advisory Board of OJSC “Guarantee Fund”, to comment on the possible appearance of a business ombudsman in Kyrgyzstan.

“The need for this institute has already appeared in our country,” says Gulnara Turarovna, “small and medium enterprises (SMEs), especially in the regions, need protection. This especially concerns inspection by some government agencies. The Prime Minister Muhammedkaliy Abylgaziev said that “an increase in the volume of investments is possible only when entrepreneurs are confident in the future, in their personal safety and business integrity, and state bodies should make maximum efforts to create favorable conditions for doing business in the country “.

Today, all entrepreneurs and the business community, in general, are waiting for concrete measures to protect the interests of entrepreneurs, to eliminate various bureaucratic obstacles hindering their successful development.

It is necessary to improve and simplify tax reporting for SMEs, transfer the relationship between business and government bodies to electronic format and reduce administrative pressure on entrepreneurs. Therefore, we, the business community, welcome the idea of ​​creating an institution of a business ombudsman in Kyrgyzstan”.

Information: According to the Internet, at present the institution of business ombudsman has been established in more than a hundred countries. In different countries, business ombudsmen have different names and differ in terms of their powers, place and role in the system of state bodies. In some states, the powers to protect the rights of entrepreneurs and business in relations with state bodies are assigned to human rights ombudsmen. Sometimes self-regulated (independent) business ombudsmen operate on the basis of unions, associations of business entities or chambers of commerce (Spain, Austria). However, in most countries, ombudsmen for the rights of entrepreneurs exist in the status of independent state bodies (officials).

In France the ombudsman institution is called Mediator, that is, the mediator (intermediary). The mediator does not advocate rights and freedoms, but “encourages” the state body to review its actions or inaction. The mediator in France is a structural unit of the Ministry of Economy, Finance and Industry. The mediator considers the complaints of entrepreneurs, following which makes recommendations aimed at improving the work of the relevant structural units of the Ministry.

In the US the Business Ombudsman Institute is part of the Small Business Administration (SBA). The National Ombudsman is appointed by the head of the SBA and is an official of this administration. A distinctive feature of the institution of the US National Ombudsman is that it deals exclusively with small business affairs. Another of its features is the presence of a regional network of offices and representative offices, which are officially called “fair regulatory enforcement in small business”.

In addition, unlike the practice of other countries, the US National Ombudsman usually does not complete the consideration of the case with recommendations to the parties. Instead, the consideration of the case ends, as a rule, with the direct response of the state body to the applicant, and the ombudsman performs the role of a “business attorney” aimed at ensuring that the matter is considered at the required level and that the principles of legality and justice are observed.

In Georgia the business ombudsman institution is called the tax ombudsman. This institute appeared due to tax reform and was established in 2011 by the Tax Code. The law states that the duties of the Ombudsman are to oversee the protection of the rights and legitimate interests of taxpayers, identify violations of rights and facilitate their recovery. This is a feature of the ombudsman institution in Georgia, which solves problems only in the field of taxation and does not deal with the resolution of other business problems.

As it can be seen from the examples given, the main functional responsibilities of business ombudsmen are related to the consideration of complaints from entrepreneurs, the issuance of opinions and the sending of recommendations to state bodies. Some business ombudsmen have the right to initiate legislation, that is, they have the right to propose to the law-making body to make changes to the current legislation in order to improve the conditions for business (Sweden). Others do not have such a right, but they can come up with proposals to improve the activities of government bodies (the United Kingdom, France).

It should be noted that business ombudsmen in all countries accept complaints only after the applicant made an attempt to resolve the disputed issue with the relevant government agency and this attempt did not lead to a satisfactory result.

OJSC “Guarantee Fund” is a reliable partner for entrepreneurs
by | Sep 10, 2018 | Expert opinion


ABDYBALY tegin Suerkul, Honored Economist of the Kyrgyz Republic

In the conditions of Kyrgyzstan, to turn an idea into a real tool, corresponding to the realities of life, taking into account the needs of the market and meeting the needs of society is not an easy task. Especially it’s rarely in our time when the idea is followed by the adoption of relevant laws and regulations, on the basis of which the necessary development institutions are created, the confidence of the leaders of the country, government and parliament is gained, funds are purposefully being allocated from the state budget to support small and medium enterprises and are effectively and profitably used!

It should be recognized as an undoubted success, taking into account the dependence of Kyrgyzstan on external borrowing and attracting, in addition to budgetary funds, additional donor funds, the creation of a new development institution using the new financial instrument, which is still missing in our financial and economic system. In our society, due to many problems of growth, weak management, inefficient use of budget funds, distrust of government structures has taken root and the appearance of a successfully operating structure on this background was a pleasant exception.

The speech is about new structure – guarantee system. The idea of its implementation came 20-25 years ago, but there was no support from government officials and ministers and it was staying unrealized. But the time has come and the leader has come, thanks to whom the development of the guarantee system in Kyrgyzstan has begun. He is a well-known specialist and leader in the financial and banking sphere, Malik-Aidar Barktabasovich Abakirov, goal-oriented, energetic, with brilliant organizational and management skills, who can, as they say, look beyond the horizon.

Among the banking services, entrepreneurs are primarily attracted by credits. The crediting process is based on the fulfillment of conditions by both parties. The client provides a collateral for the required loan amount. In case of insufficiency of the collateral, banks may request additional collateral.

In practice, not all borrowers are able to provide sufficient or additional collateral. That leads to the loan denial, or they are forced to take a smaller amount, which makes it difficult for them to implement their business plan. That’s when entrepreneurs come to the aid of guarantee funds which provide guarantees.

A guarantee system was created to assist entrepreneurs in Kyrgyzstan. With the support of donors and international organizations, the first guarantee funds were established by municipal authorities in different cities and towns of the republic. The experience of the first funds were successful and it was taken as the basis for the creation of Open Joint Stock Company “Guarantee Fund”. It should be noted that in all these processes, including the creation of the first funds, the regulatory framework development including the world experience of guarantee funds, interaction with relevant ministries, work with donors, Malik Abakirov was directly involved and made a great contribution.

Strenuous efforts to introduce a guarantee system in the country were not spent in vain. In addition to the first funds, other municipal funds appeared, then the Law “On Guarantee Funds in the Kyrgyz Republic” was adopted, the Association of Guarantee Funds was established and in 2016 OJSC “Guarantee Fund” was created. From that moment, the successful development of the guarantee system began, the first in Central Asia, its experience was recognized as successful and was highly praised by international institutions.

So, within a short time, guarantee funds were able to become a reliable partner for hundreds of entrepreneurs in need for loans, thanks to which they are now successfully implementing their business plans. After all, if there were no guarantees, it would be hard to predict in what kind of situation would be their business!

OJSC “Guarantee Fund” in fact showed that it is a reliable partner for entrepreneurs, by introducing the way to loans. On the other hand, the fund is also a partner of a number of commercial banks, attracting proven clients to the bank and reducing the degree of credit risks with its guarantees.

Successful work on the guarantee support for entrepreneurs is also important for the country’s economy, it increases the credibility of the state institutions, serves as an incentive for the development of the small and medium enterprise in almost all spheres and industries. For example, the support for rural entrepreneurs contributes to the development of processing, trade and logistics enterprises and export-import enterprises. That is, besides ensuring the domestic market, conditions are created for the output of Kyrgyzstan’s products to external markets.

At the same time, the guarantee system needs support from state structures in general and the National Bank of the Kyrgyz Republic in particular. Along with the strengthening of the monetary policy mechanisms, the guarantee system should also receive concrete support.

The progress achieved in the development of the guarantee system in Kyrgyzstan allows us to hope for the continuation of the successful activity of OJSC “GF” and other guarantee funds for the promotion of entrepreneurs. I would like to wish fruitful work in this direction to all organizations, banks and other institutions involved in the guarantee system!