Azizbek Beksultanov, professor and head of the Department of Economics and Management at Ryskulbekov Kyrgyz Economic University, noted that the main problem for business is the lack of long-term financing. In addition, entrepreneurs are hampered by high interest rates and strict collateral requirements.

StoriesWhy does business in Kyrgyzstan suffer from short-term loans?Slides: 7
  1. Why does business in Kyrgyzstan suffer from short-term loans?
  2. The problem of long-term financing for business. According to experts, the main barrier to enterprise development is the prevalence of short-term loans in the banking sector.
  3. Limitations of long-term financing. Loans are generally issued for a term not exceeding three years. This prevents businesses from planning their development.. Maximum loan term
  4. «Short-term financing does not allow enterprises to purchase new modern equipment.» — Azizbek Beksultanov
  5. Financial difficulties of business:: Profits go toward repaying loans; Payment of salaries; Taxes and contributions to the social fund
  6. What can be done? Experts propose measures to stabilize the situation, including concessional long-term lending and improving entrepreneurs' qualifications.
  7. According to the economist, businesses in Kyrgyzstan face problems because the banking sector mostly provides short-term loans, which complicates the development of enterprises.

Limitations of long-term financing for business

According to Professor Beksultanov, the financial instruments of the funds have limits on both the amount and the term. In particular, loans are generally issued for a term not exceeding three years.

  • Short-term financing does not allow enterprises to purchase new modern equipment
  • All annual profits are spent on repaying loans, salaries, taxes and contributions to the social fund

Proposals to improve the situation

To address the identified problems, the economist proposed several measures. Among them are increasing the volume of concessional long-term loans and strengthening the role of the state guarantee fund.

With short-term financing, enterprises cannot buy new modern equipment. All annual profits go toward repaying loans, salaries, taxes and the social fund
Azizbek Beksultanov

In addition, he considers it necessary to regularly provide training for entrepreneurs on drafting business projects.