Innovations in agriculture financing allow processors to increase production and enter new markets

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Innovations in agriculture financing allow processors to increase production and enter new markets

Maksat Ishenbaev, Chairman of the Bai-Tushum Bank Executive Committee, expressed gratitude to the USAID Agro-Horizon Project at the Trade and Investment Forum that took place on June 5-6 for the fruitful cooperation and contribution to the development of the economy of country regions. According to Maksat Ishenbaev, three innovations were introduced in the Bai-Tushum Bank as part of the USAID Agro Horizon Project.

«The first innovation is value added chain (VAC) financing, the second — the introduction of remote loan applications analysis through a tablet solution. Bank’s officers got an opportunity to make a quick assessment at client’s business location, which enabled our loan officers to get response on the possibility of lending within one hour. Thus, we save the time of both our clients and bank’s employees. And the third innovation we have introduced is the agent network and remote banking service development. We strive to expand the use of remote service channels by our clients, as well as to increase the volumes of loan repayments through terminals. The clients do not need to visit the office, all they have to do is to find a payment terminal next to their business or residence. As part of remote service channels promotion, we are planning to expand the cash-in terminal network and introduce a cash out system. The clients in remote regions will find this service method very convenient, as there will be no need to spend time and money to travel to a Bank’s office and borrow a loan”, — said Maksat Ishenbaev.

As part of the USAID Agro Horizon Project, the Bank has launched a total 12 value-added chains (VAC) in dairy and meat processing, as well as crop production. The total six processing plants in the Osh, Batken, Jalal-Abad and Naryn provinces were financed under value added chains for a total of KGS 56 million.

«The introduction of value chain innovations enabled the businessmen to enter new markets, including the EAEU markets, increase the production volumes and ensure the availability of regular vendors to supply quality raw materials. In addition, the VAC actors got an opportunity to get soft credit lines from Bai-Tushum Bank and use non-cash payment methods,»- emphasized Maksat Ishenbaev, Chairman of the Bai-Tushum Bank Executive Committee.

According to Guljan Toktosunova, director of Ak-Tilek butter making factory, the funding from Bai-Tushum Bank resulted in the double increase of production volumes at the plant, and the plant, in turn, was able to establish close linkages with local farmers. «We have been cooperating with Bai-Tushum Bank under the USAID Agro-Horizon Project since 2017. This is a very convenient and profitable product for all of us. We have increased the production volumes, and got an opportunity to enter the neighboring markets,» – said Guljan Toktosunova.

During the exhibition held on June 5-6 as part of the Agricultural Trade and Investment Forum, Bolot Tolon uulu, representative of the PE Akmatova milk processing plant, noted: «The PE Akmatova plant has been operating since 2005. However, you see, the equipment at the plant is outdated and this precludes us from working at full capacity. When we learned about the USAID Agro Horizon Project, we, certainly, immediately decided to find out the lending terms, and when we did so, we liked them. This is very convenient for us. We received a loan at 12 percent per annum from Bai-Tushum Bank under the VAC project. With the support of the USAID Agro Horizon Project, we are using the grant provided to upgrade the plant. In the nearest future, we are committed to expand our product range. We are planning to increase the cheese selection and produce a new product — hard Italian cheese. Currently we sell our products to neighboring Kazakhstan and produce up to 90 tons of cheese annually,» – said Bolot Tolon uulu.

Please use the following link to see the project outcomes in more detail:

 

https://www.youtube.com/watch?v=ZKbu0NleUOA