Another commercial bank has joined the preferential business financing scheme

The State Development Bank of Kyrgyzstan and ‘Bakai Bank’ have signed an agreement on the financing of micro, small and medium-sized enterprises as part of a sustainable financing programme. The agreement was signed on 30 September.

The bank has become another partner of the State Development Bank in the wholesale financing mechanism. Under this scheme, the state development institution provides funds to financial organisations, which then channel them into business lending.

For end borrowers, the interest rate under the programme is no more than 8 per cent per annum in KGS, and the loan term is up to five years. The financial institutions themselves are provided with funds at 4 per cent per annum.

The loan amount depends on the category of the enterprise. Micro-enterprises can receive up to 3 million KGS, small enterprises up to 8 million KGS, and medium-sized enterprises up to 50 million KGS. The minimum co-financing contribution from the participating financial institution must be at least 20 per cent, but no more than 50 per cent.

The funds are primarily intended for projects that comply with Kyrgyzstan’s ‘green’ taxonomy. These include the development of renewable energy, the installation of solar panels, improving the energy efficiency of buildings and production facilities, the introduction of resource-saving equipment, reducing pollution, waste recycling, water conservation, sustainable agriculture and the development of clean transport.

A separate strand of the programme focuses on financing women’s entrepreneurship. This applies to enterprises where women are founders, co-owners or managers, provided they comply with established environmental and social requirements.

Bakay Aydaraliev, Deputy Chairman of the Board of the State Development Bank, noted that expanding the number of partner banks should increase access for entrepreneurs in the regions to sustainable financing instruments.

“The partnership with Bakay Bank will be the next step in developing a mechanism that links the development institution’s resources with the needs of micro, small and medium-sized enterprises,” he said.

The sustainable financing programme for MSMEs is being implemented through participating financial institutions as part of a World Bank project.