Under the preparation of financial literacy trainers, FINCA conducted trainings for the residents of Ivanovka, Sokuluk and Novonikolaevka villages of Chui oblast.

The pilot financial literacy training was conducted by the microcredit company in early May in Min-Kush village of Naryn oblast. This initiative was very welcomed by the villagers. In June the company trainers proceeded to train their staff in branches, so that in the future they could conduct similar trainings for population in other regions.

The training of new FINCA trainers comprised of theoretical part and practical course, within which they have conducted trainings for the villagers of Chui oblast for 3 days.

– After the country gained independence new terms entered our lives– mortgage, insurance, loan, – tells FINCA Operations Manager Tynar Madylbaeva. – That is why it became crucial to be able to use funds, regardless of whether you own those or not, maintain family budget and choose right financial tools in banks and microfinance institutions.

The villagers who took part in the trainings, received information on how to borrow in a right way subject to the capabilities of family budget, on external and personal lending risks, what to pay attention to when entering into loan agreement and how to choose the best repayment schedule, how to compare interest rates and the methods of interest accrual, how to take into account all fees and costs, as well as likelihood of penalties.

The important emphasis has been made on over-indebtedness, when client receives more loans than he/she is able to repay. “Life on credit”, being rather new in the lives of Kyrgyzstan people, isn’t a novelty in the global lending experience, however it shouldn’t become an example to follow. The consequences of borrowers “credit overheating” may be very sad, but the standards of their living and their quality of life are the first to deteriorate.

The experts also warn the residents of the republic about participating in financial pyramids, as such method of fraud is wide spread in Kyrgyzstan.

Financial training had plenty of examples from the life of an ordinary villager. Heated reaction was caused by an example of fictional Tashtan-baike, who inaccurately calculated the family budget, not providing for the funds for unforeseen circumstances, got into a debt pit, and had to reduce expenses for the essential products.

Some perceive loans negatively, since they consider it to be debt. However debt can be good provided that the choice is made for an optimum and profitable loan, which is invested into the activities generating income. In other words, a good debt means borrowed funds that generate profit and improve the client’s well-being.

The training participants asked FINCA staff many questions. Those referred to the choice of conditions, repayment schedules, as well as FINCA interest rates, which reduced starting from May.

– Indeed, starting from May our interest rates on loan decreased. For instance, non-indexed group loan of up to 100 thousand KGS may be taken with a maturity of up to two years under a monthly interest rate of 2.6 %. Previously, taking 100 thousand KGS one had to pay 21 thousand KGS as an annual interest, now it is only 17 thousand KGS, – explained the head of Tokmok branch lending department Aigul Toktogonova.

In the forthcoming months FINCA is planning to implement such initiative in all regions of Kyrgyzstan on the basis of 22 existing branches. More than 20 trainers have been already trained and are to conduct training meetings on financial literacy in the nearest and remote villages of the country.