A new model for assessing small businesses has been proposed in Kyrgyzstan: entrepreneurs have been categorised into ‘four quadrants’

A new analytical approach to assessing the effectiveness of support for small and medium-sized enterprises has been presented in Kyrgyzstan. The framework was presented by Shumkarbek Adilbek uulu, Director of the National Institute for Strategic Initiatives (NISI) under the President, who proposed dividing entrepreneurs into four groups based on their potential and working conditions.

According to him, existing support measures are often general in nature and do not always yield precise results. The new framework divides people into quadrants: from the unemployed and those working in the informal sector to established businesses that create added value and are focused on growth and exports.

The model pays particular attention to the group of self-employed individuals who work in low-income sectors and often remain trapped in a ‘vicious circle’ of credit dependency. According to the author, this is precisely where the so-called financial trap arises, when state support through subsidised loans fails to help businesses transition to a more sustainable level.

Another problem is highlighted separately: the low rate at which people with high educational potential transition into actual entrepreneurship. Despite investment in education and skills development, a significant proportion of such individuals do not enter the business environment.

Ultimately, the proposed model should help government bodies to tailor support policies more precisely — from removing barriers and providing financial guarantees to enhancing entrepreneurs’ skills. According to the developers, this will allow the focus to shift from blanket measures to more targeted solutions and improve the effectiveness of small and medium-sized business development.