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Commercial Banks of Kyrgyzstan to Receive Loans

Thursday 16 February 2012

BISHKEK (24.kg News Agency) – Commercial banks of Kyrgyzstan will receive unsecured budgetary loans for the program “Available loans to farmers”. When asked about the possibility of lower interest rates for farmers, the National Bank of the Kyrgyz Republic (NB) stated the government program “100 days”.

NB explained that 1 billion soms are allotted from the state budget for the program and will be returned to the state treasury after the deadline. Income in the form of 7% per annum charged on loans will be sent to the banks involved to cover the costs.

“The project Available loans to farmers is one of the measures to support the agricultural sector in contrast to usual practice of lending. It does not aim at commercial gain and is a form of subsidy,” noted in NB. After NB, “It is not right to say that these projects are absolutely unprofitable for the country’s budget, since they have a positive multiplier effect. Profit from the program “Available credits” should be measured not so much by the interest earned from lending, as by the effect of their long-term positive impact on the economy.”

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