– Bold Magvan, XacBank, Mongolia: “Kompanion makes a huge contribution to environmental protection.”

Bold Magvan, Chief Executive Officer of XacBank, one of the largest banks in Mongolia, visited Kyrgyzstan for the first time to share best practices and promote sustainable financing principles. During his visit, Mr. Magvan took part in the Green Economy Forum, had a number of meetings with local financial experts and focused on learning from Kompanion Bank’s experience. We are grateful to Mr. Magvan for making time for this interview despite his tight schedule.

Kompanion and XacBank are like sister companies

I’ve come to Kyrgyzstan for two main reasons. First, to represent Mongolian Bankers Association at the Green Economy Forum that took place in Bishkek. We were invited to share our experience in Sustainable Finance. The second purpose is to visit Kompanion Bank to learn Kompanion’s best practices in pasture land management. I’ve known about Kompanion for many years, but I have never had a chance to visit it until now. Kompanion and XacBank are like sister companies: we share the same founder and shareholders (Mercy Corps and Triodos), our vision and missions are almost identical. Speaking of banking sectors of our two countries in general, we can note some similarities because we have the same background—going from a former centrally planned economy to a more market-oriented system. Our issues and problems are identical. So are our banking sectors. Both countries are trying to build an international banking system from scratch.

XacBank’s key success factors

Today XacBank is the 4th largest bank in Mongolia with $1BN assets. In terms of international standards, we are at the forefront as well. I would mention three crucial factors that have led XacBank to success. First of all, it is Mongolia’s liberal legal framework for banking services with minimum restrictions and government interventions. This gives you a free hand in providing financial services. The second success factor is timely intervention and assistance from international community—market players and partners have invested in XacBank providing funds to support micro lending in Mongolia. The investments included not only cash, but technical expertise and knowledge, openness, transparency, governance, networking, trainings, and exposure to external markets as well—the best they could transfer to Mongolia. The third success factor has been a great local management team: open to new creative, innovative and dynamic ideas. These three components have allowed us to achieve success.

Kompanion should be proud of its initiatives

Kompanion makes a huge contribution to preservation of the environment. It’s been impressive to see how a private bank is so eager to save the Kyrgyz land from pasture degradation at its own cost. We visited Kompanion’s clients, shepherds and villagers in Karakol and other locations and saw degraded and overgrazed lands be saved. Shepherds and families attended Kompanion’s trainings with great interest and now they are so happy seeing the results, seeing their pastures now recovering. Local government officials and households were very enthusiastic and eager to be involved in this activity arranged by Kompanion. Kompanion should be proud of this initiative. Besides land management, I saw Kompanion’s veterinarians and agronomists provide trainings to shepherds and local people encouraging them and giving them hope for better life. The trainings were aimed at improving peoples’ skills in healthy livestock management that helps prevent livestock diseases. This is another critical area where Kompanion plays a huge role on behalf of the Kyrgyz society. Providing technical expertise and knowledge through veterinarians and agronomists, Kompanion contributes to saving the whole country from animal diseases which could otherwise spread out and damage the agricultural sector of Kyrgyzstan.

Everyone will follow Kompanion very soon

Saving lands from degradation and preventing animal diseases are huge tasks that should normally be fulfilled by the government, the civil society and shepherds. It was impressive to see how Kompanion was brave enough to take leadership without hesitation to show a great example. These two contributions by Kompanion will have a huge impact on adding value to agricultural products and well-being of the population which is not acknowledged enough in Kyrgyzstan, from what I observed. But very soon many will follow Kompanion and will understand the significance of its activities. By that time, Kompanion will be ahead reaping the benefits and rewards of its hard work. I enjoyed greatly learning from Kompanion’s experience in this regard.

Always going ahead—this is our strategy

In 2009, jointly with our partners in Mongolia, we launched two financial and social education programs: Aflatoun (for children from 6 to 13) and Aspire (for children from 14 to 17). Since the launch of the program, we have trained more than 40,000 children in more than 100 schools. The Government was hesitant about the program at first, but ended up including a part of the program in compulsory curriculum since 2016. That was exactly what we wanted. Now we can exit—there is no need for us anymore. Teachers and schools can now continue the work on their own. Very soon we might go to ecological education for children, for instance. Always going ahead—this is our strategy.

Social responsibility is not about garbage collection

Collecting garbage, cleaning rivers and planting trees once a year is not an indicator of social responsibility today. This is just a drop in the bucket that can change little. Our main goal is to be socially responsible through our financial services on a daily basis. We provide environmentally friendly loans. This service strategy is the requirement of our stakeholders. Our loans should be used for environmentally friendly business development. We do not provide financial support to businesses that may harm the environment. This is what social responsibility means to us.

Preventing our borrowers from excessive indebtedness by setting conservative long repayment to income ratios and reasonable repayment terms is another strategy that we follow to provide customer-friendly financial services. In all our activities, we are striving to adhere to the principles of triple bottom line mission: “Planet, people and prosperity.”

 

– Bai Tushum Bank made lending to small, medium and corporate businesses even more convenient and affordable

The development of any business, especially a high technology business, is always connected with the need for large financial investments. In a competitive market such investments allow companies to respond to any changes in the business environment in a timely manner and increase sales. Therefore in the period of such development of companies, it is very important to have a reliable business partner who is ready to offer convenient and effective solutions.

With constantly increasing demands from business clients, Bai Tushum Bank, with the support of the Shareholder Special Fund of the European Bank for Reconstruction and Development, has launched a project to strengthen the Bank’s potential on working with segment of small, medium and corporate businesses. In the framework of the launched innovations, business clients received distinct advantages related to the shortening the time for decision making by Bank on loan provision and launching a convenient product line with a differentiated price approach. In addition, business processes in ​​lending have been substantially optimized, which reduced the cost of customer service.

One of the innovations for a business segment was a financial limit, which is set for a period of 6 months. Using this limit, clients can receive financing any time when it is necessary. It should be noted that any products within the financial limit are disbursed without additional analysis within 1-2 days. Therefore, if clients have any business opportunities or ideas, they can always rely on Bank’s support and have advantage in negotiations with their partners. And the most importantly, setting a financial limit is absolutely free.

One more innovation is an overdraft for business clients. This is a convenient product that allows to close short-term financing needs, while not overpaying for inefficiently used funds. After all, when overdraft is used, clients pay only for a specific number of days during which the product was used. The Bank’s existing and new clients can set an overdraft limit without collateral, and without the need to monthly pay the debt.

By choosing Bai Tushum Bank as a reliable financial partner, business clients will always receive an individual approach and quality service, accompanied by profitable and convenient financial solutions.

– Kompanion Invest: Development of Islamic Financing in Kyrgyzstan

What is Islamic financing and what niche does it occupy in our country? Many nationals of our country might have wondered about that. Let’s clear it up together.

The conventional concept of financing is about banks and financial institutions working only with credit and monetary instruments. Islamic financing, instead, does not recognize money as a subject of sale (except in some special cases). Money does not have its own value, it is only a means of exchange.

Challenges of Islamic financing sector

Despite the already existing fundamental theoretic and practical bases for future Islamic financial institutions, there are still some challenges in the development of Islamic financing: immature scientific environment for Islamic socioeconomic relationship (muamalat), weak legal and regulatory framework, as well as lack of skilled professionals.  

Kompanion Invest MCC LLC: Background

Kompanion Invest MCC LLC was established in November 2011. In 2012, Kompanion Invest conducted its first Murabaha agreement transaction. In November 2013, the Company became one of three finalists of the international competition Islamic Microfinance Challenge 2013. In 2016, after completing the process of implementing Sharia standards, Kompanion Invest fully switched to Standards of Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).

In April 2017, Kompanion Invest MCC LLC raised long-term financial investments from Deutsche Bank, the largest German Bank in terms of total assets. The investment agreement was signed on April 21, 2017. The agreement is in full compliance with Sharia standards. The main purpose is to support microfinance products and services that are consistent with the Islamic law. The funds were provided as part of Deutsche Bank’s New Initiatives Fund project that provides accessible financing to low–income clients in developing countries.

– FINCA Bank and the Volna Issyk-Kulya Radio launch the second stage of “The ABC of finance”

Since June 8, the Volna Issyk-Kulya Radio will broadcast the second cycle of the radio programs “The ABC of finance”.

The mutual initiative directed to increasing the level of financial literacy of the population was launched by FINCA Bank and the Volna Issyk-Kulya Radio. The residents of Issyk-Kul region had an opportunity to listen to the first cycle of series of three minute broadcasts in Russian in April.

FINCA Ban, whose one of the key directions of the activity is increasing the level of financial literacy of the population, acts not only as a sponsor of the radio programs, but it also provides information on the management of personal finance: loans, deposits and many other things.

You can listen to the radio program from to July 6, at the radio frequency FM 107.7 in Karakol and FM 107.5 in Cholpon-Ata daily at 7:30, 8:30, 9:30, 10:30, 11:30, 12:30, 13:30, 14:30, 15:30,16:30,17:30  and 18:30.

 

 

– Kompanion Bank launched special offer on loans

Kompanion Bank offers special conditions on loans for business development and group loans only from March 1 through March 31 of this year under special spring offer. Interest rates on loans for small and medium-sized businesses in KGS have been decreased by 4%. In addition, during the promotion period, new customers can get a group loan without additional interest.

“We are continuing to create new bank products and improve the lending conditions for small and medium-sized businesses. It should be noted that, Kompanion Bank provides personalized service for each customer. We offer flexible repayment schedule and free consultations of the bank’s agronomists and veterinarians, which helps to support entrepreneurs,”- noted Ulanbek Termechikov, CEO of Kompanion Bank CJSC.

Detailed information can be obtained from the offices of Kompanion Bank CJSC, www.kompanion.kg site, as well as by contacting the contact center: 0 (312) 33-88-00, 88 00 (for mobile calls).

About Bank:

Kompanion Bank CJSC, established in 2004, has passed all the stages of institutional development and significantly expanded its presence in the market of Kyrgyzstan. The Bank with assets of 6.5 billion KGS and equity of 1 billion and 700 thousand KGS has 109 offices throughout the country, and provides services for more than 96 000 clients. Mercy Corps, the Dutch Development Bank FMO, and European investment fund Triodos Investment Management are the shareholders of the Bank.