Kyrgyz cuisine boasts many traditional recipes that derive from the Kyrgyz Republic’s ancient nomadic culture. Milk and homemade dairy products abound among herders and cheese such as soft kaimak and salty kurut are just a two of the local varieties commonly found on Kyrgyz tables.
In the mountainous region of Talas, not far from the border with Kazakhstan, Jandar Joloev and his family established a dairy company, Emiliya LLC, and started producing cheese and butter in 2006. But operating obsolete equipment dating back to the Soviet era and with limited milk processing capacity became a real hindrance to the growth of the business when his products were increasingly in demand with Kazakh customers.
With a first self-financed investment, the Joloev family started building a new cheese plant and buying modern equipment. But to complete their project and move forward with a new butter production line, the company needed extra financing.
Local financial institutions have a hard time catering for mid-market players like Emilia with larger and longer loan terms, which bear more risk.
Enabling SMEs to scale up and strengthening the financial sector are two of the EBRD’s priorities in the Kyrgyz Republic. So, in order to support both local banks and their potential private sector clients, the EBRD designed the Risk Sharing Facility (RSF), which co-finances loans extended by local partner banks to selected small and medium-sized enterprises (SMEs) and shares up to 50 per cent of their risk.
In the Kyrgyz Republic, the risk-sharing component of the RSF is supported by the European Union’s Investment Facility for Central Asia. In the EBRD’s Early Transition Countries (ETCs), RSF is also supported by the ETC Fund* through specific training programmes for credit officers of participating local banks.
With an RSF loan worth US$ 300,000 via the Kyrgyz Investment and Credit Bank (KICB), Mr Joloev’s company Emiliya completed the renovation of the cheese production facility, fitted it with state-of-the-art equipment and built a completely new butter manufacturing plant.
The loan also provided an opportunity for KICB to expand its operations into the remote Talas region and to acquire new clients.
“Kyrgyz companies like Emiliya show local financial institutions the great potential of tapping into an unserved segment of the market: medium-sized enterprises,” said Jyldyz Galieva, Associate Director of the EBRD Resident Office in Bishkek.
“Meanwhile, the EBRD is helping to bridge the current financing gap and help local banks get familiar with new financing instruments, tailored to the needs of these important economic players.”
Emiliya is currently repaying the loan. “Thanks to the cooperation with the EBRD and KICB our business has a solid future ahead,” Mr Joloev said. “This year we have produced 422 ton of cheese and 49 ton of butter. Our export increased by 6 per cent and our turnover by 12 per cent.”
With the two new plants working at full steam, local milk suppliers benefit from Emiliya’s investment too.
Mr Joloev is already thinking of his next step: he plans to secure a bigger share of the promising Kazakh market by increasing the range of products, eliminating intermediaries and to get an export licence to bring his cheese directly onto the neighbours’ tables.
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