Microfinance in Kyrgyz Republic


	The loans have financed agricultural inputs for growing cotton, potatoes, vegetables, wheat, etc.

AKAM’s microfinance activities in the Kyrgyz Republic have primarily been in the rural mountainous areas of the Osh and Naryn provinces. Beginning in the Alai and Chon Alai districts that Tajikistan, the programme extended its operations to areas adjoining the mountainous districts of Karasu and Uzgen. To complement the provision of mountain studies and entrepreneurship at the University of Central Asia, microcredit activities have also been initiated in Naryn Province which is at the heart of Tien-Shan mountain range.

In less than three years, the microfinance programme has disbursed over US$ 8.9 million to 10,709 beneficiaries. Nearly half of them are women. These loans have financed agricultural inputs for growing cotton, potatoes, vegetables, wheat, etc. as well as animal husbandry, trading activities, housing repairs and education.

These microfinance activities are meant to provide clients with a bridge between microfinance and the services offered by the Kyrgyz Investment and Credit Bank (KICB), which was set up in 2001 by AKFED and other international agencies. KICB provides a wide range of products and services, including short-term working capital loans, medium- to long-term credits, trade finance products, corporate deposits, international money transfers, money market and foreign exchange operations as well as correspondent banking.

The legal transformation of the on-going programme into a full-fledged microfinance bank was initiated during 2005. In a first phase, the programme will evolve into a microcredit company. In line with microfinance regulations in the Kyrgyz Republic, it is intended that the institution will seek a full license after two years of operations, so that it then will be allowed to offer deposit services.

AKAM worldwide

AKAM’s microfinance initiatives range from village lending cooperatives to self-standing microfinance institutions to full-fledged microfinance banks. These activities currently operate in Afghanistan, Burkina Faso, Egypt, India, Kazakhstan, Kenya, Kyrgyz Republic, Madagascar, Mali, Mozambique, Pakistan, Syria, Tajikistan, Tanzania, and Zanzibar. Often they are part of wider integrated development strategy being implemented by the AKDN within each country. In addition to providing financial services to the poor, they may include business or technical advisory/training extension services and business development programmes that work directly with local entrepreneurs.