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.