A Working Group was established to draft the Concept on Guarantee Funds Development in the Kyrgyz Republic by the Ministry of Economy’s Order#38 signed on December 21, 2015 by the Minister of Economy Mr. Kozhoshev. In accordance with the Order #38, the working group was established to develop the Concept within two months and submit for consideration and approval by the Government of the Kyrgyz Republic. The development of the Guarantee Funds is necessary in order to implement the Plan of the Ministry of Economy of the Kyrgyz Republic on the implementation of the Plan of the Government of the Kyrgyz Republic for the development of exports of the Kyrgyz Republic for 2015-2017 years.

There are 6 guarantee funds currently operating in Kyrgyzstan such as Osh, Jalal-Abad, Sarai, Kara-Balta, Karakol, and Kant. New GFs have been planned in Uzgen, Talas oblast, and other municipalities. The existing guarantee funds achieved the following during the period 2011 to June 30, 2015: (1) over 400 guarantees amounting to 35 million soms in total were provided; (2) banks provided loans in total amount of 172 million soms; (3) guarantees' revenues reached 290 million soms; (4) taxes in amount of 1.5 million soms were paid; (5) 330 new jobs were created and 840 existing ones supported; and (6) guarantee/loan repayment rate remained 100%. All this proves that the GF system is needed to support entrepreneurship. All guarantee funds have proven to be profitable and self-supported.

The Guarantee Funds were established with support of the USAID Local Development Program and functioning in accordance with the Law on Guarantee Funds in the Kyrgyz Republic adopted in 2013. The Guarantee Fundsproviding entrepreneurs with guarantees for loans and lease contracts under insufficient security.

The USAID Collaborative Governance Program is supporting the Association of the Guarantee Funds in their effort to introduce necessary amendments to the Law on Guarantee Funds to promote entrepreneurship development and remain committed to maintaining the high guarantee/loan repayment rate.