News block
Published: 03 March 2016 г.
Bishkek – The Association of Guarantee Funds initiated legislative amendments to boost the work of guarantee funds that assist entrepreneurs in obtaining loans by providing financial guarantees. The proposed amendments will increase guarantee amounts and remove provisions that hamper creation of private guarantee funds. Public hearing on amendments to the Law on Guarantee Funds in the Kyrgyz Republic will take place on February 29, 2016 at Plaza Hotel (52 Togolok Moldo st.). The event is supported by USAID and DFID through the
Collaborative Governance Program.
Members of Jogorku Kenesh, entrepreneurs, representatives of financial institutions, the Ministry of Economy, municipalities as well as the civil society will attend the public hearing.
Proposed changes will increase the amounts that can be secured by a fund from 30 to 50 percent of the total loan amount and from 5 to 10 percent of the fund’s total capital. In addition, the amendments will remove the 20% limit for private shares in guarantee funds which has been an obstacle in creating new funds with private capital.
Malik-Aidar Abakirov, Chairman of the Association of Guarantee Funds, believes that these amendments will help businessmen to support or expand their businesses through access to larger financial resources.
The first guarantee funds were established in 2010 with support of the USAID Local Development Program to assist loan-seekers who were unable to obtain necessary amounts due to insufficient collateral. Currently, there are six guarantee funds operating in Kyrgyzstan. Since 2011, they have provided over 400 guarantees enabling their clients to obtain 172 million soms in loans and generate 290 million soms of income.
The new draft law was upheld by many stakeholders during the first public hearing that took place in Jalal-Abad in September 2015.
The Collaborative Governance Program seeks to strengthen partnership between government, civil society, and private sector of the Kyrgyz Republic. The program is funded by the United States through USAID and the UK Department for International Development, and implemented by East-West Management Institute (EWMI).