The Guarantee Fund and Eldik Bank to launch guarantees for Islamic finance

OJSC ‘Guarantee Fund’ and OJSC ‘Eldik Bank’ have signed an agreement to provide guarantees in accordance with Islamic finance principles. The new mechanism will enable entrepreneurs to access finance even if they lack sufficient collateral.

The agreement was signed by Malik-Aidar Abakirov, Chairman of the Board of the Guarantee Fund, and Akylbek Turdaliev, First Deputy Chairman of the Board of Eldik Bank.

The guarantee will cover part of the financing amount not secured by collateral, but not exceeding 50% of the total amount. The mechanism is designed to support businesses, including entrepreneurs who prefer financing in accordance with Sharia law.

For many entrepreneurs, the lack of sufficient collateral remains one of the main obstacles to obtaining financing. The new instrument is intended to increase the availability of funds for business development and reduce risks for the bank.

The development of Islamic financial instruments is one of the ways to expand business access to alternative sources of financing in Kyrgyzstan.