Dairy cluster development – farmer - within the RKDF direct funding


Growth in dairy production and export development within a single value chain.

Target borrowers:

Dairy enterprises.

· Milk producers (farms).

· Other entities participating in the dairy cluster. 

Target-oriented loan disbursement:

Funds can by allocated:

Investment objectives:

· Purchase of machinery and equipment.

· For construction and installation works, reconstruction and purchase of industrial facilities.

· For the dairy cattle purchase.

Current assets funding within the framework of an investment project funded by the RKDF:

· Biological raw materials purchase;

· Feed purchase;

· Spare parts purchase;

· Purchase of veterinary medicines, vitamins, etc.;

· Purchase of other materials as part of an investment project.

Loan rescheduling:

In exceptional cases, a loan may include a rescheduling component. The rescheduling component, including refinancing loans from other banks, must not exceed 30% of the loan amount, and can be provided subject to the following conditions being met:

1. the rescheduled loan was used for investment purposes and is associated with the ongoing project;

2. the target-oriented disbursement of the rescheduled loan is confirmed by the relevant documents for the transaction (account statements, contracts, invoices, customs declaration, waybill, certificate of completion, certificate of acceptance);

3. rescheduled loan availability period is at least 6 months at the time of the application review;

4. no overdue payments on the rescheduled loan principal and interest;

5. the absence of revolving debt rescheduling due to a worsening financial situation or debt servicing (loan principal and interest repayment), unless otherwise decided by the RKDF Board.

At the same time, the total amount of all loans with refunding should not exceed 30% of the total funding limit within this program.

Refunding of loans provided by financial institutions other than banks is prohibited.

Borrower own contribution:

For investment loans at least 15% of the project cost, for project funding (greenfield projects) - at least 20%.

Funding currency:

· Kyrgyz som;

· U.S. dollars.

Funding amount:

  • from 100 thousand US dollars (or the equivalent in Kyrgyz soms) in Talas, Batken and Naryn regions.
  • from 200 thousand US dollars (or the equivalent in Kyrgyz soms) in other regions and remote areas of the Chui region.
  • In the city of Bishkek and nearby districts of Chui oblast, the minimum threshold is 1 million US dollars

Loan term

Investment purpose, including cattle purchase - up to 7 years

Current assets funding - up to 3 years

Exemption period

Investment loan, including breeding cattle purchase - up to 36 months

Current assets funding - up to 6 months

Interest rate:

Kyrgyz som - 8% per annum (excluding the loan rescheduling rate - 10%).

US dollars - 4% per annum (excluding the loan rescheduling rate - 6%).

Requirements for the applicant

·sales contract with a processor accepted by the RKDF.

· dairy cattle livestock in the amount of at least 20 heads (for farms containing cattle).

· warranty or guarantee from the manufacturer is an additional advantage during the application process.

Collateral security requirements

· real estate;

· movable property (equipment, machinery);

· biological assets.

· assets acquired during a project implementation, including biological assets purchase.

· guarantee of OJSC "Guarantee Fund".

· contract claim right.

The collateral coverage ratio in the industrial phase should be at least 100% of the loan amount, while the collateral coverage ratio set before the first tranche issuance should be at least 30% of the loan amount.

The rights of claim under the contract considered as collateral at zero cost.

The collateral is subject to insurance in accordance with the RKDF requirements. The Fund must be listed as the Beneficiary in insurance policies in order to receive insurance compensation.

Technical assistance to the applicant through SPSF

At the stages of the project preparation and implementation, it is possible to provide technical assistance on a grant basis for hiring consultants for the project assistance.

In this case, the Applicant covers part of the costs from the own funds in the amount of at least 15%.

Requirements for the cattle suppliers

Breeding cattle supplier has to submit the following documents:

1. Tribal card.

2. Breeding farm license.

3. Veterinary certificate for the cattle purchase.

Mandatory compliance with the Rules for the animals identification approved by the Government of the Kyrgyz Republic.