Kyrgyz Banks Suffer From Border Closures
Kyrgyz Banks Suffer From Border Closures
Kyrgyzstan’s banks suffered a downturn in business when the country was isolated by its neighbours in April and May.
After mass protests which toppled Kurmanbek Bakiev as president and brought in a new interim government, both Uzbekistan and Kazakstan shut their borders. The effect on cross-border trade was dramatic – with no one moving in or out of the country, imports and exports took a hammering.
Trading fizzled out at the large wholesale markets, Dordoi near the capital Bishkek, which mainly serves merchants from Kazakstan, and Karasuu in the south, a magnet for Uzbeks in search of Chinese-made consumer goods to sell at home. Farmers in Issykkul region found themselves with stockpiles of potatoes and no way of getting them to customers in nearby Kazakstan.
Businesspeople reliant on the export trade found themselves unable to service loans they had taken out with Kyrgyz banks, which responding by offering flexible repayment schemes.
Much of the banking sector is based on loans of this kind, so the loss of income was caused for alarm as financial institutions dipped into their reserves.
The audio programme, in Russian, went out on national radio stations in Kyrgyzstan, as part of IWPR project work funded by the Norwegian Ministry of Foreign Affairs.
