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State mortgage company OJSC announces the launch of "Housing Finance Program" funded by the Government of Germany, through KfW Bank.

28 August 2019

State mortgage company OJSC  announces the launch of "Housing Finance Program" funded by the Government of Germany, through KfW Bank.

State mortgage company OJSC  announces the launch of "Housing Finance Program" funded by the Government of Germany, through KfW Bank. Citizens of the Kyrgyz Republic in the regions of the country (except the cities of Bishkek and Osh) will have access to mortgage lending at a rate below market (10% per annum, with an initial payment of at least 20% of the cost of housing for up to 15 years).

In accordance with the "Housing Finance Program" mortgage lending will be carried out in three main areas:

  • Purchase housing  "Kut conush»;
  • Purchase housing with subsequent reconstruction "Bek Ustun»;
  • Financing of Individual Housing Construction - “Ashar».

As part of  Нousing Finance Program, participants will be able to purchase new housing, renovate the purchased housing, and build a house on their land. 3 commercial banks were selected to implement the "Нousing Finance Program" under KFW:

  •  «RSK Bank» OJSC
  •  «Kyrgyzstan» OJSC
  •   «KICB» OJSC

In the second decade of August, tаke place solemn signing of the Agreement between  State Mortage Company OJSC  and  “Kyrgyzstan” OJSC.  Now the participants of the program “Affordable housing 2015-2020 " will be able to directly contact the banks and issue mortgages.

The signing was attended by the Deputy Chairman of State mortgage company OJSC Nurjigit Usenakun uulu and the first Deputy of the management Board of “Kyrgyzstan” OJSC Sagyndykov Zharkynbek.   During  2018-2019 year it is important to note the effective work of the coordinator of the financial sector KFW German Bank Sultan Aiylchiev.

The German government through KFW Bank allocates financing in the amount of 11 million euros for the implementation of projects aimed at the development and improvement of housing conditions in the regions of Kyrgyzstan. (10.5 million euros to Finance mortgage loans and 0.5 million euros to provide technical assistance to the State mortgage company and banks for the project.

      The aim of this Programme is to enable Financial Institutions  to provide affordable long term housing loans in local currency to households with a low or medium income in rural areas of the Kyrgyz Republic. Rural areas are defined as all regions outside of Bishkek and Osh. Low or medium income households are such households with a monthly income of the equivalent KGS of EUR 250 for families without children. For families with children the following income limits may be increased to the following KGS equivalent:

  • EUR 350 for families with one child;
  • EUR 400 for families with two children;
  • EUR 425 for families with three children;
  • EUR 438 for families with four children;
  • EUR 450 for families with five and more children.

The objects financed under this Programme shall be in KGS equivalent of a range between EUR 10,000 and EUR 30,000 per housing unit. It is allowed that objects of a maximum KGS equivalent of EUR 70,000 .

The main difference between the "Нousing Finance Program" through KFW is the direct appeal of citizens to partner banks, without recourse to local administrations.  This reduces the financial costs and time of participants  the program, as well as facilitates the procedure for obtaining a mortgage loan.

Requirements for Program participants:

  • Availability of employment, business or   PF (Private farms);
  • The borrower, the borrower's spouse and the borrower's minor children do not have their own housing on the territory of the Kyrgyz Republic;
  • Absence of any civil transactions with residential premises in the  territory of the Kyrgyz Republic for the last 3 years prior to the date of application for a loan from the borrower, spouse of the borrower and minor children of the borrower;
  • Solvency of the borrower;
  • The borrower must not reside or work in Bishkek or Osh. At the same time, housing should be within a radius of not more than 60 km from the place of employment, but should not be in Bishkek and Osh;
  • The borrower must have a family of at least 1 person.