Kyrgyzstan is one of the poorest post-soviet countries. The majority of low-income residents live in single family houses, with low quality housing standars. In order to do these improvements, most residents need to take up a loan. However, since they neither have large savings nor regular income, banks often do not accept low-income clients and are reluctant to provide a loan. The objective of this project is therefore to develop a tailored Housing Microfinance lending product, which is linked to the provision of non-financial services, so that low-income residents can obtain financing for their basic home improvements.

The overall goal of the project is to make financing accessible to low-income households for home improvements. This will enable residents to improve their living standards, by for example, building better roofs, installing energy efficient windows or insulate walls. Micro and small enterprises are also included in the project and can benefit through the installation, of for example solar hot water heaters on their roofs.

Various Microfinance institutions in Kyrgyzstan issue Housing Microfinance loans for low-income residents.

Home owners can get loans specifically to improve the energy efficiency of their houses or appartements.

Micro and small enterprises can get loans to install solar hot water heaters.

Expected results:  

Technical construction support tools (for example videos or information leaflets) are developed for borrowers.

Microfinance institutions, construction material suppliers and borrowers received trainings or in-depth advisory services.

Various studies / analysis are conducted.

Workshops for borrowers, MFIs and the material suppliers are conducted.

The Kyrgyz population is informed on the HMF loans thanks to the awareness raising campaigns conducted.

Results from previous phases:  

SECO already financed Phase I of the project, which started at the beginning of 2012 and which will end in July 2015. Key phase I results include: By the end of 2014, over 670 HMF loans for a total amount of USD 1.8 million were disbursed. Interviews conducted with the first borrowers demonstrated that the low-income home owners are highly satisfied with the product. Furthermore, the portfolio at risk (PAR) of the two banks issuing HMF loans is zero, meaning that the repayment rate is excellent. The primary goal of phase I of the project was to develop a feasible, more sustainable HMF approach and to test it in practice. Most of the efforts therefore went into designing and preparing tools and procedures, and in testing and amending them during the course of implementation.

Phase 3 01.02.2012 - 31.03.2019   (Completed)