Small and Medium Enterprises in Kyrgyz Republic to Benefit from ADB Loan

BISHKEK, KYRGYZ REPUBLIC – The Asian Development Bank (ADB) is providing critical long-term funding to small- and medium-enterprises (SMEs) in the Kyrgyz Republic through a $10 million loan to the Kyrgyz Investment and Credit Bank (KICB).

Lakshmi Venkatachalam, Vice-President of Private Sector and Cofinancing Operations at ADB, and KICB Chairman of the Management Board Kwan Young Choi were present at the signing of the loan agreement today in Bishkek. This will be the first investment in the Kyrgyz Republic supported by ADB’s Private Sector Operations Department.

“In Kyrgyzstan, as in most developing countries, SMEs are important supporters of economic growth and key contributors to poverty reduction through increases to individual incomes and employment creation,” says Vice-President Venkatachalam. “The provision of medium and long-term financing to Kyrgyz SMEs, still suffering from the 2010 political crisis, is essential for them to be able to invest in the technology and capital needed to increase productivity and competitiveness.”

The development and growth of SMEs in the Kyrgyz Republic has been hindered by an inability to access funds, due to the country’s low level of financial sector development. ADB’s $10 million senior unsecured loan, to be delivered to KICB in two tranches with an overall tenor of eight years, will be used exclusively for onlending to SMEs.

Along with the loan, ADB plans to render technical assistance to help KICB expand and increase the efficiency and sustainability of services to SMEs, which should in turn help the sector make a greater contribution to overall economic growth and employment generation in the Kyrgyz Republic.

KICB is a joint stock company incorporated in 2001. KICB’s mission is to provide commercially viable banking services to companies and individuals, including SMEs.