Kyrgyzstan’s microcredit sector reportedly has been growing in recent years and extending to outlying regions. The growth of microcredit in rural regions has corresponded to an increase in agricultural business following the June 2010 ethnic riots in the country.
Since June 2010, 50 percent of microloans have been directed to agriculture, 32 percent to business and 8 percent to consumer needs, according to the Association of Micro Finance Institutions (AMFI), a network of 19 microfinance institutions (MFIs) in Kyrgyzstan that aims to create a supportive environment for MFIs. In comparison, in 2008, lending to retail businesses had accounted for 44 percent of microlending and agriculture 37 percent.
According to CentralAsiaOnline.com, a website sponsored by the US Military, an independent financial analyst Bolot Nazarov said, “MCOs are more flexible and mobile. Although they operate with small sums, they cover more clients. That is why they started significantly spreading into the provinces. … Micro-loans are precisely what is going to save the villages from ruin.” The same website cites figures from the National Bank of the Kyrgyz Republic indicating that 400 MCOs in the country reach 5 percent of the rural population while the usual figure is 1 to 2 percent in Central Asia.
Regarding the Central Asian Microfinance Fair that will be held in Bishkek, Kyrgyzstan, in July, Gulnara Shamshiyeva, director of the MCO Bai Tushum, said, “MCO directors have great expectations for the summit and are hoping it will lead to a fruitful dialogue since the foreign partners might be able to provide funds at lower rates.” Ms Shamshiyeva added, “The unstable political and economic environment is hampering foreign investments, resulting in higher interest rates.” Ernest Kamchybekov, director of the MCO Elet Kapital, reportedly cited lack of domestic resources as an additional barrier to reducing interest rates on microloans.
By Carol Kim, Research Associate
About National Bank of the Kyrgyz Republic: The National Bank of the Kyrgyz Republic is the central bank of Kyrgyzstan. Its overall objective is to achieve and maintain price stability by implementing an appropriate monetary policy. Primary among the bank’s tasks is to maintain the purchasing power of the national currency, and the safety and reliability of the banking and payment system of the republic.
About Association of Microfinance Institutions (Kyrgyzstan): Association of Microfinance Institutions is a network of 19 microfinance institutions (MFIs) launched in December 2005 that aims to create a supportive environment for MFIs in Kyrgyzstan.
Sources and Additional Resources:
Central Asia Online: “Micro-Credit Expands in Kyrgyzstan”, June 2011, http://centralasiaonline.com/cocoon/caii/xhtml/en_GB/features/caii/features/main/2011/06/13/feature-02
MicroCapital.org: “MICROCAPITAL BRIEF: Bai Tushum & Partners and Mol Bulak, Two Microfinance Organizations, Launch Revival Foundation for Devastated Regions of Kyrgyzstan”, June 18, 2011, https://www.microcapital.org/microcapital-brief-bai-tushum-partners-and-mol-bulak-two-microfinance-organizations-launch-revival-foundation-for-devastated-regions-of-kyrgyzstan/
MicroCapital.org: “MICROCAPITAL BRIEF: responsAbility Loans $3.9m to Microfinance Institutions (MFIs) Arvand of Tajikistan, Mol Bulak of Kyrgyzstan, Constanta and Lazika Capital, Both of Georgia”, June 17, 2011, https://www.microcapital.org/microcapital-brief-responsability-loans-3-9m-to-microfinance-institutions-mfis-arvand-of-tajikistan-mol-bulak-of-kyrgyzstan-constanta-and-lazika-capital-both-of-georgia/
MicroCapital.org: “MICROCAPITAL BRIEF: Triodos Invests in Microfinance Institutions (MFIs) KixiCrédito of Angola, Advans Ghana, Arnur Credit of Kazakhstan, Belarusian Bank for Small Business, Kompanion of Kyrgyzstan”, June 15, 2011, https://www.microcapital.org/microcapital-brief-triodos-invests-in-microfinance-institutions-mfis-kixicredito-of-angola-advans-ghana-arnur-credit-of-kazakhstan-belarusian-bank-for-small-business-kompanion-of-kyrgyzstan/
MicroCapital.org: MICROFINANCE EVENT: Uniglobal Hosts Central Asian Microfinance Fair 2011, Bishkek, Kyrgyzstan, July 7 – July 8, 2011”, May 10, 2011, https://www.microcapital.org/microfinance-event-uniglobal-hosts-central-asian-microfinance-fair-2011-bishkek-kyrgyzstan-july-7-july-8-2011/
MicroCapital’s Universe Profile: National Bank of the Kyrgyz Republic, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Bank+of+the+Kyrgyz+Republic
MicroCapital’s Universe Profile: Association of Micro Finance Institutions (AMFI Kyrgyzstan), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Association+of+Microfinance+Institutions+of+Kyrgyzstan+%28AMFI%29
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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