Kyrgyz Development Fund establishes microcredit company

The Development Fund of Kyrgyzstan has created a microcredit company for financing of the agricultural sector, the institution reported.

AUB-AGRO Microcredit Company has been reportedly registered in Kyrgyzstan. The company was established as a part of the Central Development, Investments and Innovations Agency and Development Fund’s project by the Kyrgyz Development Fund and Asia Universal Bank.

The authorized capital of AUB-AGRO makes up 100 million soms. The Development Fund and Asia Universal Bank are planning to spend in total 1 billion soms on implementation of the micro crediting project in 2010.

The microcredit company will be engaged in realization of the Central Development, Investment and Innovation Agency and Development Fund’s project on improvement of Kyrgyz rural residents’ well-being and development of agrarian, industrial economic sectors through micro credits.

“Agricultural sector is one of the main components of the Kyrgyz economy,” Maksim Bakiev, Head of the agency said. “Establishment of the company is aimed for servicing of this sector, and it is an element of scale state strategy on development of the country. We allocated considerable financial resources for its implementation,” he said.

The company plans to grant credits in national currency. Interest rates will not exceed 23 percent of annual interest rates, the fund said. It is planned to stipulate the conditions and directions of credits’ use with borrowers in the individual order. The company is going to introduce practice of conducting credit history for agricultural producers. It is supposed, that it will enhance the responsibility of borrowers for use and returning of credits. The successful credit history becomes one of the conditions for positive decision while considering applications for granting of credits on concessionary terms.

"Development of agriculture, creation of conditions for improvement of living standards in regions of the country and maintenance of food safety - one of priority problems for a management of Kyrgyzstan and the Development Fund in particular,” Igor Chudinov, Chairman the Kyrgyz Development Fund’s board said. “Efficient control of financial resources and a reflexivity of micro credits are necessary for its decision. The microcredit company AUB-AGRO is created for the purposes, which will offer the flexible conditions of crediting, focused on particular needs of rural workers,” the chairman said.

In 2010 it is planned to give out about 5 thousand loans for agricultural producers in regions of Kyrgyzstan. “Micro credit company uses regional offices of Asia Universal Bank to provide countrymen with credits in due time and everywhere,” Vyacheslav Rozhkov, General Director of AUB-AGRO said. “New branches of micro credit company will be opened in areas without AUB offices. So we can provide residents with credits all over Kyrgyzstan,” he added.