BISHKEK (TCA) — A Guarantee Fund has been established in Kyrgyzstan, Economy Minister Arzybek Kojoshev said at the Kyrgyz Government meeting on July 29, the Government’s press service said.
The Guarantee Fund open joint stock company has been created to support lending of small and medium businesses (including export-oriented and import-substituting enterprises), support SMEs in rural areas, help create new jobs, boost the development of the country’s regions and reduce internal migration, increase the share of SMEs in the country’s GDP, and support women entrepreneurs.
Minister Kojoshev earlier said that establishment of the Guarantee Fund would be a good impetus for developing small and medium business in Kyrgyzstan.
According to the minister, restricted access to finance due to a lack of collateral stands on the way of successful development of small and medium business. Some 40-50 percent of potential borrowers in Kyrgyzstan, especially in rural areas, are refused bank loans for business development due to a lack of collateral.
To solve this problem, the Economy Ministry initiated, and the Government supported, the establishment of the Guarantee Fund to provide a guarantee for banks when small and medium businesses lack collateral for obtaining a loan.
The minister said this will help improve the sustainability of SMEs, increase their production and income, increase the country’s export potential, and reduce poverty and migration.
The minister also said that production, agriculture, processing of agricultural produce, trade and services are priority areas for provision of guarantees by the new Guarantee Fund.
