HKDF financing conditions

Financing principles

The lending and investment activities of the Fund are carried out in compliance with the following principles:

• recurrence;
• loan repayment;
• urgency;
• target orientation;
• security.

Business entities criteria

Business entities applying to the Fund for financing must meet the following criteria:

• be a registered economic entity of the Kyrgyz Republic in accordance with the requirements of the legislation of the Kyrgyz Republic;
• have a transparent ownership structure;
• the absence of negative information about the owners and managing directors (participation in bankruptcies of other companies, presence of criminal record, etc.)
• have a stable financial position;
• have a satisfactory credit history on previous borrowings from financial and credit institutions, if any;
• the absence of tax arrears, other payments to the budget and social insurance contributions.
• have experience in the industry of the funded project or have a partner company with relevant experience.
• not being subject to sanctions provided for by decisions or rules adopted by the Council of the European Union.

Investment projects criteria

Projects financed by the Fund must meet the following criteria:

• compliance with the goals and objectives of the Fund;
• the existence of a justified investment application/business plan;
• the owner of the project must make his own monetary contribution in the amount of at least 15%, in the case of project financing - at least 30%; The cost of intellectual property and the provided land plot is not included in the own contribution;
• the presence of a minimum and acceptable collateral security for the project;
• minimum share of Hungarian content and/or Hungarian service – not less than 30% of the loan amount.

The funded project must not have negative environmental, political, or social impacts. The funded project must be feasible in the existing economic and legal conditions of the Kyrgyz Republic. The financed project must be profitable and allow the client to repay the loan and interest on it within the terms established by the agreement. The project owner must have the appropriate conditions for the implementation of the project.

Interest rates and terms of financing

Interest rates on loans from 1.5% to 7.25% per annum, depending on the importance of the project for the economy of the Kyrgyz Republic, the degree of Hungarian content, the duration of the project and the level of collateral security.

The funding currency is the US dollar.

The terms of financing should not exceed 10 years.

Collateral Security Requirements

The Fund accepts the following types of security for the fulfilment of obligations for the provided financing:

• guarantees of financial and credit institutions;
• pledge of assets, the eligibility of which is assessed by the Fund;
• guarantees of third parties, the acceptability of which is assessed by the Fund.