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Finance Ministry allocates 520 mln soms to banks for preferential loans

The Ministry of Finance of Kyrgyzstan held an open auction for placement of targeted fixed-term bank deposits. Website of the ministry says.

It is noted that these are repayable funds under the programs of the German Development Bank (KfW). Funds for a total amount of 1,332 billion soms were put up for placement at the auction in the form of targeted fixed-term bank deposits.

Applications for participation in the auction were submitted by 4 out of 11 commercial banks. They meet the selection criteria for participation in the auction and have concluded cooperation agreements with the Ministry of Finance.

All submitted applications of commercial banks were met for 520 million soms.

Fixed-term deposits of commercial banks placed by the Ministry of Finance are to be used by banks for lending on concessional terms for entrepreneurial purposes in the agricultural sector in the regions as the most important sector of the economy for ensuring the country’s food security.

The Ministry of Finance plans to hold subsequent auctions for the placement of KfW funds among commercial banks for preferential lending to business entities as part of the government’s program Financing of Business Entities.

«Various sources of financing are attracted for implementation of the program, and, according to the requirements of donors, part of the funds will be financed according to the auction mechanism, another part — in the form of budget lending. The Ministry of Finance will publish on its official website financing conditions for each stage of financing, as well as information on the allocated amounts by commercial banks,» the ministry stressed.