Emergency Support for MSMEs Project

The objective of the Emergency Support for Micro, Small, and Medium Enterprises Project for Kyrgyz Republic is to support MSMEs in response to and during the recovery from the COVID-19 crisis. The Project has three components. 1. Reimbursable Financial Assistance to Micro, Small, and Medium Enterprises (MSMEs) component will help businesses survive the economic slowdown and retain employees by supporting their short-term liquidity needs for operational expenses. The Reimbursable Financial Assistance (RFA) will be designed to best fit the needs and characteristics of different types of beneficiaries. 1.1. RFA for micro entrepreneurs subcomponent will provide RFA to eligible subsistence micro entrepreneurs from a total pool of approximately 87,500 businesses. 1.2. RFA for Small and Medium Enterprises (SMEs) subcomponent will provide RFA to eligible SMEs. 2. Portfolio Risk-Sharing Facility component will reduce the risk of financial sector deleveraging from MSMEs’ lending during the crisis and it will ensure credit provision to MSMEs during the recovery. This component has two subcomponents. 2.1. Financing for the Portfolio Risk-Sharing Facility (PRSF) subcomponent will provide funding for the PRSF under three windows: (i) Window 1: overdrafts and short-term loans to MSMEs; (ii) Window 2: restructured MSME credits that were in good standing prior to the COVID-19 crisis; and (iii) Window 3: new MSME long-term loans. 2.2. Capacity building to the Open Joint Stock Company Guarantee Fund (GF), Participating Financial Intermediaries (PFIs), National Bank of the Kyrgyz Republic (NBKR), and other stakeholders subcomponent will include capacity building to the GF, PFIs, NBKR, and other stakeholders, as well as an upgrade in the GF’s management information system to support the rollout and monitoring of the guaranteed portfolio. 3. Project implementation, coordination, and management component will finance overall project implementation, coordination, and management.