How Gender Bonds Help Women Entrepreneurs in Kyrgyzstan? (Interview)

Almost a year ago, Bank of Asia CJSC together with partners: UN Women, GFC, KFB, Senti issued the first gender bonds in Kyrgyzstan.

The purpose of gender bonds is to support women entrepreneurs of the Kyrgyz Republic by financing business projects.

Atakishieva Zemfira Akishovna, Chairperson of the Board of Bank of Asia CJSC, will tell us how the perception of gender bonds in the society has changed over the year and what results have been achieved.

- Nowadays, when profitability of non-banking financial instruments is steadily growing, it is important to consider new opportunities for investments. One interesting option is gender bonds offered on the Kyrgyz Stock Exchange. But how can they be used to generate profits?

The Kyrgyz Stock Exchange provides a wide range of securities of various companies, financial organizations for investors. Each of them has its own unique yield and degree of risk and the decision to purchase depends on your financial goals and the level of risk that is acceptable to you.

Our gender bonds represent a unique asset. Against other bonds, the returns may be more modest, but we emphasize that they are a socially responsible investment instrument. Gender bonds not only can generate returns, but they also allow to contribute to social development and support gender-equitable entrepreneurship.

- To what extent can they bring profit and influence the situation of women in Kyrgyzstan?

Certainly, on the positive side. In our country, women entrepreneurs play a key role in the economy. Bank of Asia has decided to support, inspire and help our women. Gender bonds are another way to stimulate and support women entrepreneurs. This does not mean that they are now underestimated, but rather represent a new stage in the development of women entrepreneurship in Kyrgyzstan.

According to statistics, more than half of the entrepreneurs in our bank are women, and we were able to offer them low interest rates. Today, credit resources at 15% is a really favorable offer. This will not only allow women to grow and develop, but will also have an impact on the overall economic development of our country.

- In November, it will be one year since the gender bonds were issued. How successful has this period been? What results have been achieved till date.

We can confidently say that we have achieved excellent results. We were not able to fully place all 82 million KG soms, but the amount raised of 29 million KG soms is a good result. This project helped to attract attention of representatives of various spheres of activity to the gender issue.

The Bank is actively supporting and promoting gender bonds through a memorandum with the Kyrgyz Stock Exchange as part of its Environmental, Social, and Governance (ESG) strategy. This is part of the Bank's consistent work in promoting the ESG strategy. The first step was the introduction of social development principles in the bank itself. This was followed by the signing of a memorandum and the next step was the issuance of gender bonds.

- How much funds were raised through the sales of gender bonds, what concrete benefits were derived from this initiative.

We were able to attract 29 million KG soms and to date there are 53 investors, including both legal entities and individuals. Among the major holders of gender bonds are the Russian-Kyrgyz Development Fund, Kyrgyzstan Non-State Public Foundation, Jubilee Kyrgyzstan Insurance Companies, Insurance Company "Kyrgyzstan" CJSC, NSC CJSC, Bailyk Finance microcredit company, Kyrgyz Stock Exchange CJSC, as well as individuals.

27 million KG soms were lent immediately and it became known already in September. One of our entrepreneurs from Zhalal-Abad oblast decided to support our initiative by buying gender bonds. This opens up future prospects for us, and we are actively working to find new investors who will also hopefully support our important initiative. We can confidently call our bondholders socially responsible investors who have made a great contribution to the social project of the bank aimed at the development of women's entrepreneurship in the Kyrgyz Republic. Taking this opportunity, Bank of Asia CJSC once again expresses its great gratitude to our investors.

- Bank of Asia became the first in Kyrgyzstan to issue gender bonds, and globally this segment of the bond market is actively developing. Nevertheless, the interest in gender bonds in our country is not so great yet. How to create demand and draw the attention of the population to this product?

Indeed, we have become pioneers in issuing gender bonds in Kyrgyzstan, and this is worthy of recognition. Our project could not have materialized without the valuable support of our partners - the Institute for Economic Policy Research, UN Women, GFC Astana, the Kyrgyz Stock Exchange and Senti Brokerage Company. Thanks to the joint efforts of each of our partners, information about the gender bonds quickly spread both in Kyrgyzstan and beyond. In July 2023, at the CIS Bond Congress, Bank of Asia was honored with the Cbonds Awards CIS - 2023 nomination in the category "Best Initial Public Offering Deal in Kyrgyzstan".

History shows that interest in new initiatives does not come immediately. Therefore, it is important for us to continue to actively inform the general public about this initiative. We must constantly educate our population and entrepreneurs about the benefits of gender bonds, similar to financial literacy training. Talk about how and why it is worth investing their money in bonds, emphasize the importance of financial planning and achieving results.

- Why does the Bank actively pursue an environmental and social responsibility (ESG) strategy in its development?

For our bank, ESG strategy is not just a fashionable movement, it is our path to sustainability and well-being. Our conviction in this is supported by a number of key aspects that shape our strategy and put ESG at the center of our efforts.

First of all, we attach great importance to social aspects - creating comfortable working conditions for our employees, concluding labor contracts in accordance with the law, and providing life insurance for employees. Then we pay attention to environmental aspects in our activities.

We actively lend to "green" projects, introduce environmentally friendly corporate vehicles, install electric charging stations, and use environmental technologies, which is very important in today's world.

ESG is our contribution to a sustainable future and the creation of a favorable environment for both employees and customers.

- The proceeds are used to provide loans to small and medium-sized businesses. Can you tell me which business sectors have already been covered?

Most of the allocated funds were directed to several SME sectors. A significant share of investments was directed to the garment industry, catering and pharmaceuticals. It is important to note that about 80% of the resources were directed to production, which contributed to the creation of new jobs, mainly for women.

Taking into account the needs of the population, most of the investments are concentrated in Bishkek, Issyk-Kul oblast and Osh oblast.

- Can you tell us about further prospects for the development of gender bonds in Kyrgyzstan?

Bank of Asia has been a bondholder in the stock market of Kyrgyzstan for the last 10 years, thus diversifying its investment portfolio. We have actively purchased bonds of local companies Rozkamet LLC, Shoro CJSC, Abdysh Ata LLC, Pervaia Metallabaza LLC, MK Salym Finance OJSC and KICB. And today we ourselves act as issuers by introducing gender bonds with an annual interest rate of 12% to the market. These bonds not only provide investors with a favorable instrument to increase their capital, but also contribute to the development of women entrepreneurs' business, bringing not only financial profit, but also satisfaction from participation in a socially important project.