New financing for Kyrgyz micro entrepreneurs

By Ina Coretchi

The EBRD is boosting the availability of finance to private businesses in Kyrgyz Republic with a new local currency credit line for on-lending to micro and small enterprises (MSEs).

The Bank is providing a $1 million loan in Kyrgyz som to Mol Bulak Finance, one of the top five microfinance institutions in the Kyrgyz Republic, for on-lending to local entrepreneurs in rural regions of the country.

In the current environment, when banks are reducing their lending activities due to liquidity constraints, the microfinance institutions remain a key source of funds for the development of Kyrgyz MSEs.

Lack of lending from the formal banking sector has enabled Mol Bulak to expand its client base.

The EBRD credit line will support further development of Mol Bulak Finance, enabling it to increase its outreach to small business entrepreneurs in remote areas of the country, where access to financing remains limited.

Provided in the local currency, the loan will help Mol Bulak Finance to reduce foreign exchange risk.

“This transaction will deepen the level of financial intermediation in the Kyrgyz Republic and will bring much needed financing to MSEs in rural areas. Increasing financing for entrepreneurs supports the growth of the Kyrgyz economy”, said Masaru Honma, EBRD Director for Central Asia, at the signing ceremony in Bishkek.

“Mol Bulak Finance was recently named by MIX Market the most dynamically growing micro finance institution in the region. This growth is only possible because of support of our partners. We would like to sincerely thank the EBRD for cooperation. Given our small average loan amount, this credit line will reach more than two thousand Kyrgyz businesses” said Babur Tolbaev, Chief Executive officer of Mol Bulak Finance.

Since the beginning of its operations in the Kyrgyz Republic, the EBRD has invested over €185 million in more than 50 projects in the infrastructure, corporate, energy and financial sectors. The EBRD funds attracted additional investments worth over €100 million.