Bishkek, Kyrgyz Republic, May 28,
2008—IFC, a member of the World Bank Group, has helped the government
of the Kyrgyz Republic develop an amendment to the country’s tax code
that will help expand the leasing sector. The provision was signed
into law earlier this month by the president.
The law will benefit local businesses,
particularly those in the agricultural sector. Implementing effective legislation
will help increase foreign and local investments in the leasing sector
and expand access to finance for small and medium enterprises. This will
allow them to purchase the equipment they need to operate more efficiently.
“The new law is a significant step
forward. We can now offer our clients leasing products in addition to bank
loans, providing entrepreneurs with choices that best fit their business
needs,” said Gulnara Shamshieva, General Manager of Micro Credit Agency
Bai Tushum Financial Fund, a leading microlending institution in the Kyrgyz
“Expanding the leasing sector will
help create jobs, increase GDP, and bolster state tax revenues. The
sector has not yet realized its full potential in the Kyrgyz Republic due
to provisions in the tax code that regulated VAT and withholding taxes.
The new law addresses these challenges,” said Cholpon Kokumova, IFC Operations
IFC is working with the governments
of Azerbaijan, Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan
as well as the local private sector to expand leasing for smaller businesses.
This effort is part of the IFC Azerbaijan - Central Asia Leasing Facility
Project, a $30 million credit facility and a three-year advisory services
program. It helps SMEs improve their risk management and internal control,
assets and liabilities management, human resource management, credit analysis,
leasing operations, and management information systems.
The initiative has shown significant
results. As of December 2007, participating financial institutions have
engaged in leasing transactions worth more than $93 million. IFC was a
catalyst for outside investment, attracting $25 million from clients.
The IFC Azerbaijan - Central Asia Leasing
Facility Project is supported with funds from the Government of Switzerland.
IFC, a member of the World Bank Group,
fosters sustainable economic growth in developing countries by financing
private sector investment, mobilizing private capital in local and international
financial markets, and providing advisory and risk mitigation services
to businesses and governments. IFC's vision is that people should have
the opportunity to escape poverty and improve their lives. In FY07, IFC
committed $8.2 billion and mobilized an additional $3.9 billion through
syndications and structured finance for 299 investments in 69 developing
countries. IFC also provided advisory services in 97 countries. For more
information, visit www.ifc.org.
The State Secretariat for Economic Affairs
is the Swiss Confederation's competence center for all the core issues
related to economic policy. Its aim is to create basic regulatory and economic
policy conditions to enable business to flourish and benefit all. SECO
also represents Switzerland in the large multilateral trade organizations
and international negotiations, and is involved in efforts to reduce poverty
and help developing countries with transition economies build sustainable
democratic societies and viable market economies. Each year, Switzerland
spends about 1.9 billion francs on development cooperation and transition
assistance to countries.