Could you introduce Salym Finance and the microfinance context in Kyrgyzstan?
Salym Finance Company is one of the leading microfinance institutions in Kyrgyzstan, on the 2nd position in terms of loan portfolio.
The economy and employment nature of the population of Kyrgyzstan determines the financial relations system in the country, in which the overwhelming numbers of borrowers (80% of all current borrowers) are clients of microfinance organisations and commercial banks offering microfinance services.
70% of the company’s clients are from rural areas and 55% of them are women. Salym Finance is active in the microfinance market, occupying about 8% of the microfinance market, serving currently 12,000 customers with a portfolio of USD 17.3 million.
A special feature of the Salym Finance Company in the microfinance market is the focus on family responsibility of clients, since, based on the specifics of micro and small business, the family is an economic unit and financial relations of a person significantly effect on a family.
All your products have a social orientation and are well customised to the needs of your clients. Could you describe your range of products?
We offer 4 products:
- agricultural loans (20%);
- business loans (24%);
- housing loans (40%);
- consumer loans (16%)
These are the most demanded products by our clients and understandable to the public, which meet their current business and life needs.
Our products are socially oriented since the terms of the loans are oriented for rural residents and their requests for relatively small amounts without collateral.
Housing loans, which are 40% of the company’s loan portfolio, are highlighted. They are provided since 2013, and showed a high demand among our clients. Housing loans meet the specifics of farming, income levels and the house creating tradition of the local population. These loans are used to finance certain stages of construction: the construction of foundation and walls; the construction of roofs; installation of windows and doors; installation of heating and isolation; and housing decoration. These loans improve the quality of life of rural people and internal migrants, and generate an especially important impact on the lives of women and children, who are provided with basic living conditions for living, access to heat and water.
Business loans are mainly aimed for trade and services sectors. Trade can be both food trade for a certain populated area and trade of clothes and household items in the markets. Services can be related to the transport of goods and passengers. Also sewing production is financed.
Agricultural loans are for livestock and fruit cultivation. Financing of education is also found in consumer loans portfolio.
Almost three quarters of the poor live in rural areas, suffering from high unemployment and less access to education and social services. How does your institution help address these issues?
People in rural areas in Kyrgyzstan have enough opportunities for the implementation of agribusinesses – cattle breeding and cultivation of agricultural products, such as:
- crops (clover, cereals, sugar beet);
- vegetables (potatoes, tomatoes, carrots, peppers, cabbage); and
- fruits (apples, apricots, raspberries, strawberries).
At the same time, cattle breeding is a traditional activity for houndreds of years for the local population with the related developed farming technologies and climatic conditions (mountain pastures and methods for keeping of cattle in winter time).
Our company as a specialised organisation for provision of loans creates financial conditions for the rural people who don’t have access to banking services.
Regarding access to education, it should be noted that each rural family seeks to send its children to universities and institutes, as well as in specialised colleges. Usually, educational institutions are located in the capital and large cities of Kyrgyzstan. The costs for education and maintenance of children are a significant part in the expenses of a rural family.
Are you planning to create new products, for example non-financial products, savings/deposit products? What are your next steps for the future?
We have applied for a deposit license and are planning to provide savings services from mid-2019 on. For Salym, the provision of savings services to customers is a strategic task.
In the future, the Company plans to expand its client’s service in rural areas by expanding the network of offices throughout Kyrgyzstan.
One of the most important goals is to provide high quality services to clients and adhere to the principles of consumer rights protection. To this end, the Company plans to be certified by the Smart Campaign in February 2019.