The leading microfinance institution (MFI) in the Kyrgyz Republic, Kompanion, will receive a new EBRD credit line in the local currency, the som, to boost lending to micro, small and medium-sized enterprises (MSMEs) across the country.
The three-year credit line for an equivalent of US$ 9 million will be on-lent to Kompanion’s clients, especially in rural areas.
Kompanion is a long-standing partner of the EBRD in the Kyrgyz Republic. Since 2007 the EBRD has signed six loan agreements with Kompanion for a total of US$ 17 million. To date, Kompanion has disbursed about US$ 618 million to SMEs in the Kyrgyz Republic through more than a million loans.
A few weeks ago, Kompanion received a preliminaryconsentfrom the National Bank of the Kyrgyz Republic regarding Kompanion’s request for a banking licence. When the licence is issued, it will become the third microfinance institution in the country to become a bank, which will allow it to start accepting deposits and so diversify its funding base.
Larisa Manastirli, the EBRD Head of Office in Bishkek, said: “At a time when local currency financing is practically absent in the Kyrgyz Republic, this credit line will enable Kompanion to offer loans to smaller enterprises in remote areas which do not have foreign currency revenues and cannot afford the foreign exchange risks. Moreover, many of these enterprises work in areas not served by banks, so a loan from a microfinance institution, like Kompanion, is their only option of financing. We are proud to continue our cooperation with Kompanion on this important transaction.”
“Kompanion aims to encourage micro and small entrepreneurs in rural areas and contributes to the community development by providing financial and technical support. This credit line will increase the availability of local currency finance to MSEs and we hope to make it easier for our clients to access the financial resources to support their businesses,” said Kompanion CEO, Ulanbek Termechikov.
Supporting SMEs is one of the priorities of the new EBRD country strategy for the Kyrgyz Republic, approved in 2015.
