BISHKEK (TCA) — Establishment of the Guarantee Fund is a good impetus for developing small and medium business, Kyrgyz Economy Minister Arzybek Kojoshev said at the media briefing in the Economy Ministry on June 29.
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 has initiated and the Government has supported the establishment of the Guarantee Fund that will provide a guarantee for banks when small and medium businesses lack collateral for obtaining a loan.
The main goals of the Guarantee Fund are to support small and medium businesses (including export-oriented and import-substituting enterprises) in their access to finance, 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 GDP, and support women entrepreneurs.
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 added that production, agriculture, processing of agricultural produce, trade and services are priority areas for provision of guarantees by the new Guarantee Fund.