"Guarantee fund" JSC will be replenished with the money of the Russian-Kyrgyz Development Fund, the Minister of Economy of the KR Arzybek Kozhoshev said today at the briefing.
According to him, a regular meeting of the fund's council, chaired by the Russian Minister of Finance Sergey Storchak was held on September 30. One of the issues on the agenda was the participation of Russian-Kyrgyz Development Fund in the capitalization of Guarantee Fund.
Russian-Kyrgyz Development Fund is ready to invest $10 million in "Guarantee Fund" JSC. The money will be allocated in tranches. Russian-Kyrgyz Development Fund will be the co-founder of the Guarantee Fund.
At the end of 2015 the share of small and medium businesses in the GDP amounted to 40.5 percent. At the same time, one of the important instruments of development is access to finance, i.e. to the "long" and cheap money.
Due to the lack of collateral and lack of development of the real estate market in the region, taking a loan for small and medium businesses becomes difficult. To solve the problem, the government has created "Guarantee Fund."
At present, capital of JSC comprises 72 million soms. Another $3 million will be provided by the Asian Development Bank. As a result, capital of Guarantee fund will be about 280 million soms.
JSC will act as guarantor of obtaining credits by entrepreneurs. If a businessman doesn't have the means to bail, Guarantee Fund will give it.
"Guarantee fund" enables businesses to get "cheap and long money." This is one of the tools of government assistance in available credits. The experience of guarantee funds in six regions of the country says that it works well," Arzybek Kozhoshev said.
The government noted that the Russian-Kyrgyz Development Fund signed a memorandum with the Czech Export Bank. It is planned that the latter will give small and medium business loans at the same interest rates as Development Fund gives to entrepreneurs through banks.