Newsletter January 2011
KNZRT introduces micro-credit support in our villages
The trustees are very happy to announce the successful completion of negotiations for a NZ$210,000 loan from the Morgan Foundation in New Zealand. These funds are being used by the Aiyl Bank (which means “peoples bank”) in Kyrgyzstan to provide micro credit to villagers and small farmers looking to set up sustainable livelihood projects by capitalising on the grant funding, technical advice and training provided by KNZRT. The micro credit will include group loans using “Grameen Bank” principles and will be for amounts ranging between US$500 and $2,000.
The first loans have already been made, with borrowers delighted to have access to both advice and training, together with the necessary finance to support viable small businesses. The Morgan Foundation loan will provide critical access to finance in an environment where credit is often extremely hard to access, and interest rates are very high and unaffordable to most people, especially those without collateral.
This micro credit will provide much needed additional business development finance to KNZRT sponsored small enterprise groups which have demonstrated their commitment to participating in capacity building provided through KNZRT and are now enjoying commercial success in their small but vital ventures.
Newsletter October 2010
In August, New Zealand trustees Brian Hedley and Tony Ryan spent 3 weeks visiting all 8 villages in the KNZRT program of assistance. This involved detailed meetings with a selection of the 90 groups and 700 beneficiaries to assess progress and future needs, and to develop more effective approaches to program delivery.
Tony Ryan & Brian Hedley meet goat groups in Baigonchok
The trustees had discussions with 40 enterprise groups, including goats, greenhouse, potatoes, sewing, bakery, milk processing, home garden/fruit trees and village veterinarians. The over-whelming impression was one of both considerable progress in delivery and significant impact on the lives of the beneficiaries.
Several of the enterprise groups are distributing monthly incomes to members of $40-100, maintaining profitable businesses and running savings and credit funds. With goats to poor women, over 5 years, members can accumulate assets of around $500, plus have the opportunity to earn income from cashmere and animal sales.
Food security is assured, especially in late winter for women in particular, and by maintaining livestock numbers families can grow their asset security by about 400% over 5 years.
KNZRT newest activity – greenhouse vegetable production
Analysis of KNZRT’s investments shows that for every $1 of incremental investment, sustainable beneficiary net gains of between $2 and $5 are achieved. This is most encouraging, showing that our funds are being skilfully targeted – to the benefit of both donors and beneficiaries. Reasons for such impressive returns are productivity gains from improved technology, value adding wherever practical, and improved market strategies. Goat reproduction rates are up from 85% to 105%, potato yield gains are from 15 to 22 tonne per ha, and incomes from greenhouse production of $1300 annually for a group of 5 women.
However, the program is reaching a plateau. While consolidation will benefit existing village activities, further funding would greatly enhance capacity to increase coverage to new families and new villages. Coverage of poor families varies by village, from 78% down to 20% (a new village). Average coverage across all 8 villages is 41%.
Micro-credit Contract signed with Aiyl Bank
KNZRT believes continuing access to technical, business and financial support is vital to maintaining and growing the impact of our investments beyond the trust’s period of engagement. To this end, with the help of the Morgan Family Trust (a New Zealand based charity), we have provided a line of credit to Aiyl Bank specifically for the support of our more mature, growth oriented groups. We are also looking to establish a village veterinarian in each of our villages, and to pilot the development of village based advisers.
KNZRT contractor and RAS manager Bakyt Balbiev.
KNZRT trustees and management are currently working with Aiyl Bank staff to ensure lending begins in the spring of 2011. An important part of this exercise is to ensure all interested groups have a well defined growth vision and business plan in place. The trustees are very grateful for support from Zyinat Toktomambetova – a micro-finance banking specialist with a wealth of current experience in Kyrgyzstan. Zyinat will supervise the delivery of the new credit line. KNZRT’s Kyrgyz trustee group recently visited Naryn to assist with this process.
KNZRT introduces improved financial management and reporting system
KNZRT has recently introduced a revised financial reporting system. It will enable trustees to provide more accurate and relevant financial reports to donors and improve efficiency of preparation of audited annual accounts. However it will involve more work for the KNZRT program manager (Mr Bakyt Egemberdiev) and our contracted delivery partners. The trustees are grateful to Aida Bekboeva who will provide administration and translation support to the Kyrgyz trustee group.
Family fruit trees provide further food security.