MICROCAPITAL BRIEF: Kyrgyz Microfinance Institutions “Successfully Compete” with Banking Sector in Providing Access to Finance

President of Kyrgyzstan, Roza Otunbayeva, reportedly said at the recent Central Asian Microfinance Fair that microfinance institutions (MFIs) in Kyrgyzstan are emulating the banking sector in providing loans in the country. According to Kyrgyzstan news agency 24.kg, as of December 31, 2010, the Kyrgyz microfinance sector served 390,000 active borrowers and held a total portfolio of KGS 11 billion (USD 243 million). As of the same date, the Kyrgyz banking sector reported a portfolio of KGS 26 billion (USD 574 million). As of December 31, 2009, 39 MFIs in the country reported data to the US-based nonprofit Microfinance Information Exchange (MIX).

Referring to the development of the microfinance in Kyrgyzstan over the years, Ms Otunbayeva reportedly said that she invited microcredit organizations to work in Kyrgyzstan in the early 1990s, when she served as Ambassador to the United States. “It was hard to convince USAID [United States Agency for International Development] to open such organizations in the KR [Kyrgyz Republic]…International donors have argued that we needed macroeconomic stability. Today, all banks are developing microfinance.” said Ms Otunbayeva.

By Carol Kim, Research Associate

About United States Agency for International Development (USAID): USAID is a government agency that provides international economic and humanitarian assistance. It focuses on areas such as economic growth, agriculture, trade, health, democracy, conflict prevention and humanitarian assistance. Under the Development Credit Authority (DCA), it provides credit guarantees that cover up to 50 percent of defaults on wholesale loans made by private financial institutions to institutions that lend on a retail basis to underserved borrowers. The proposed USAID budget for 2011 is USD 18.8 billion.

Sources and Additional Resources:

24.kg: “Kyrgyz microfinance organizations successfully compete with the banking sector”, July 2011, http://eng.24.kg/business/2011/07/07/19103.html

MicroCapital.org: “MICROCAPITAL BRIEF: Microfinanace Expands in Rural Kyrgyzstan as Lending Shifts to Agriculture”, June 21, 2011, https://www.microcapital.org/microcapital-brief-microfinance-expands-in-rural-kyrgyzstan-as-lending-shifts-to-agriculture/

MicroCapital.org: “MICROCAPITAL BRIEF: IFC to Provide Local Currency Loans Worth Total of $13m to FINCA Azerbaijan, FINCA Kyrgyzstan to Expand Access to Microfinance”, June 16, 2011, https://www.microcapital.org/microcapital-brief-ifc-to-provide-local-currency-loans-worth-total-of-13m-to-finca-azerbaijan-finca-kyrgyzstan-to-expand-access-to-microfinance/

MicroCapital.org: “MICROCAPITAL 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: The United States Agency for International Development (USAID), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=United+States+Agency+for+International+Development+%28USAID%29

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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