The Russian-Kyrgyz Development Fund supported by the National Bank and “Guarantee Fund” JSC will be implementing the startup-financing program in Batken, Talas and Naryn regions.
As a part of implementing of the decree of the President of the Kyrgyz Republic «On declaring 2019 the Year of Regional Development and Digitalization of the country», the Russian-Kyrgyz Development Fund, the National Bank and «Guarantee Fund» JSC have designed startup financing program for Batken, Talas and Naryn regions. Financial support of these particular regions at the initial stage is related to the need for assisting to their economic development considering difficult geographical and climatic conditions.
The program aims to fund the startup projects that imply processing of the local farmers’ agricultural products.
The Russian-Kyrgyz Development Fund is going to allocate and equally distribute 1 million USD within three regions, which is approximately 350 thousand USD for each region. Also, the minimum loan threshold in the RKDF’s direct financing makes 200 thousands USD. It means that projects starting from 200 to 350 thousands USD can apply for the program directly to the Fund. Moreover, there is a possibility to get funds from commercial banks, which are taking part in this program.
The peculiarities of this startup-financing program are the absence of requirements on the breakeven activity within three years, and minimal requirements on a collateral security. There are also soft conditions such as low internet rate — from 4% per annum, loan term up to 7 years, grace period up to 24 months, consulting support etc.
According to the program, the own entrepreneur’s contribution should make no less than 15% of the total project cost. This contribution can consist not only of the financial resources, but also of the project assets. «Guarantee Fund» JSC is ready to provide the selected entrepreneurs with guarantees.
To involve community and to ensure the transparency of the process, on the regional level a special Commission on projects selection will be formed, which will include representatives of the Regional administrations and business society, and the ones of the Russian-Kyrgyz Development Fund and «Guarantee Fund» JSC. The Commission will pick out the projects that are the most suitable to the aims of the program and forward them to the RKDF for further consideration. Based on the results of this consideration, the RKDF will choose one project for each region.
«We expect this project to increase the regional business activity, and the enterprises created to give an essential multiplicative effect and become a basis for a cluster production development. Based on the results of the pilot projects’ implementation, this practice will be extended to the other regions» — the RKDF’s head Erkin Asrandiev has pointed out.