Published
03/24/2025, 13:49Agriculture in Kyrgyzstan is actively developing, accounting for nearly 13% of the country's GDP. However, it remains a highly risky sector. Farmers' success depends on weather conditions, quality of care and timely investments. Expenses for fertilizers, equipment and livestock renewal require substantial funding, especially in spring, and banks often become the key solution.
"Akchabar" decided to study the conditions under which banks issue agricultural loans and identify the most favorable offers. Currently, 12 out of 21 banks provide financing for agricultural development. The average interest rate starts at 14% and may vary depending on the bank and specific collateral requirements.
When choosing an agricultural loan, it is important to consider the interest rate, repayment terms, and potential hidden fees. You should also check the collateral and security requirements, as well as whether there is flexibility in repayment and the possibility of restructuring if needed. This will help you select a loan that best suits your business needs.
Of course, the lowest interest rates are offered by the government. Today, there are special programs such as "Agro-Industrial Complex Lending", "Agriculture Financing-13" and "Financing of United Commodity Producers". Their interest rates typically do not exceed 10%. The main goal is to support farmers, enabling them to improve their working conditions and create new jobs. These loans are issued through two state banks — "Ayil Bank" and "Eldik Bank". Since this financing is preferential, every farmer wants to obtain a loan. However, the program has its own conditions and a queue system, meaning not everyone qualifies. Therefore, the market offers a wide range of loan options from financial institutions.
The financial sector is developing rapidly, and each bank strives to stand out. Some process applications in no more than two days, others issue loans in foreign currency, while others offer loans of several tens of millions of soms.
For example, KICB is ready to issue loans of up to 36 million KGS with an interest rate starting from 16%, while Demir Bank, under the KFW program, offers up to 37 million KGS at the same rate. Bai-Tushum Bank provides loans starting from 17%, and Capital Bank from 18%, with the option to take loans in both dollars and euros. Additionally, interest rates of up to 20% are available at Mbank, Commercial Bank KSB and Optima Bank.
At the same time, for small farms, not only the interest rate but also the minimum loan amount is important. For example, Kompanion Bank offers loans starting from 5,000 KGS (with rates from 20%), which is convenient for small agribusinesses.
Additionally, FINCA Bank and FinanceCreditBank KAB offer interest rates starting from 20% and higher.
However, Ayil Bank and Eldik Bank remain among the most favorable options, as they offer their own agricultural loans in addition to government loans, with interest rates starting from 14% — a record low among banks in the country.
When comparing these two state banks, Ayil Bank offers a wider range of financing options. Here, you can obtain loans not only for livestock and crop production but also for the processing of agricultural products, light and food industries, as well as for the production of agricultural goods. Additionally, the bank provides loans in three currencies: soms, dollars and euros. In contrast, Eldik Bank's website states that loans are issued only in the national currency.
The purchase of machinery is one of the largest expenses in farming. To address this, there are leasing programs that allow for the acquisition of equipment in installments. This is especially convenient for those who cannot pay a large sum upfront but wish to enhance productivity with modern machinery. Leasing not only enables farmers to update their equipment without significant one-time costs but also allows them to account for the seasonality of agricultural business in their payments.
In Kyrgyzstan, three banks offer leasing for agricultural machinery:
For farmers, it is important not only to choose a loan with a low interest rate but also to consider other conditions — terms, the possibility of seasonal payments, and the currency of the loan. Among the options presented, Ayil Bank appears to be the most attractive due to its low rates, flexible terms, and a wide range of financing tools, including leasing for agricultural machinery. Agrarians should carefully analyze the conditions before taking out a loan and select financial instruments that will support the long-term development of their farms.
