Abhishesh Adhikari | KF19 | Kyrgyzstan

P1040628

One of the most exciting things about Kyrgyzstan is the potential for the growth of entrepreneurship. Over the last few months, I had the opportunity to travel all across this country and meet a wide variety of borrowers and potential entrepreneurs. From young college students in Bishkek to farmers in the remote regions around Naryn, shopkeepers in violence affected areas of Osh to livestock owners in Batken. Just twenty years after the fall of the Soviet Union, there seems to be a lot of enthusiasm here for starting up small businesses.

Looking at the demographics and the challenges involved, I would categorize Kyrgyz entrepreneurs into two major categories. First, there are the young college students and graduates from around Bishkek and other major cities who are interested in starting service-oriented businesses. Second, there are entrepreneurs from the more remote regions who want to start new farms and livestock businesses.

Startups in Bishkek and other cities

When people think of a “Startup” in the United States, they mostly think of technology related companies. This is probably because a lot of the innovation in the US revolves around making existing processes more efficient. However, after living in Bishkek for more than two month, I can see a lot of potential here for startups that aren’t necessarily technology related. The country lacks a lot of services that could make people’s lives a lot easier. For instance, a few times every week when I take out my trash, I need to walk about 10 minutes to get to the nearest dumpster. How great would it be if somebody here started a trash collection business?

Fortunately, there are a lot of young people in the country who are enthusiastic about starting such businesses. Given this enthusiasm, one of my main goals here is to help launch a new Startup Loan product in which Kiva and Bai Tushum are going to collaborate. This new loan product is designed to help young entrepreneurs with limited business experience.

P1040258

Bishkek’s first ever Startup Weekend Event

Last month, Kyrgyzstan held its first ever Startup Weekend event in Bishkek. As a part of laying the groundwork for our Startup Loan Product, I gave a presentation there about Kiva, entrepreneurship, and how we hope to use this new loan product to help potential entrepreneurs. The event consisted of about 80 young entrepreneurs, and many other investors and influential members of Kyrgyz society.

presentation2

Giving a presentation during Startup Weekend Bishkek

All  80 entrepreneurs gave one-minute pitches about their startup ideas. They were pretty diverse and included things like starting a youth oriented magazine, a turkey farm,  a food delivery business, and even building a soccer field (Soccer is very popular in Kyrgyzstan!)

P1040294

Young entrepreneurs trying to collect votes for their ideas

Everybody got to vote in order to select the 15 best ideas. The remaining entrepreneurs joined one of these selected projects and worked on further developing them over the weekend. I had the opportunity to spend time with some of these teams to critique and help refine their ideas. This gave me a much better understanding of the opportunities and challenges facing Kyrgyz entrepreneurs. At the end of the weekend, the groups gave their final presentations and the top 5 ideas were rewarded by investors and sponsors.

P1040318

Brainstorming

Interestingly enough, one of the groups had the idea of a trash collection business! The young woman leading the group was a very busy college student with a part-time job, and she was using whatever time she had left to start this new business.

P1040297

Trash collection business model

We discussed the logistics, timeframe, cash flows, and ways to move this forward. This potential business would not only be profitable, but also very socially impactful.  Currently in Kyrgyzstan, people don’t really recycle. If her business takes hold, she could incentivize her clients to start recycling, and sell these recyclable goods to manufacturers: profitable and at the same time extremely socially impactful.

P1040327

Discussing different ways to launch the trash collection business

With some basic support in business training and financing, I think a lot of these projects could really grow to have a positive influence in Kyrgyz society.

Startups in the remote regions

Entrepreneurship outside of Bishkek takes a slightly different form. While most startups ideas around Bishkek focus on service-oriented businesses, people in the more remote regions primarily work on agriculture and raising livestock.

P1040877

Me with a livestock owner in a remote village near Batken

Some of the borrowers that I met actually survived solely on what they produced in their farms and through their livestock. While they are mostly self-sustainable, they have to rely on insufficient government welfare if their harvest doesn’t go well. However, a lot of them could get some financing in order to expand their farm/livestock and produce enough to sell and turn it into a profitable venture.

P1040468

A borrower couple in a remote village in the South. They survive solely on what they produce from their farm and livestock

P1040472

Showing off his livestock

I also met a lot of borrowers in the villages who wanted to open up small shops for trading. They had ideas about selling a wide variety of products in their shops: groceries, meat products, household items, winter clothes, and many more. Most of the villages have a nearby marketplace (called bazaars), where they can easily open up stalls to start selling.

P1040797

A small shop owner. She mostly sells groceries

Another area of potential entrepreneurship in Kyrgyzstan is the production of craftwork. Hats, carpets, towels, and clothes with intricate designs are very popular in Kyrgyzstan. It is a pretty competitive industry, but the barriers to entry aren’t that high. Anyone with a good sense of design and skilled in craftwork can sell a lot of these items. With just about 500 dollars, one can gather all the raw materials and equipment necessary to start such a business. One of the women that I met near Osh specialized in the production of hats, and produced about 40 hats every day. The demand for her product was so high that she recently hired a part-time employee to help increase production.

P1040618

Producing a traditional Kyrgyz hat!

While the concept of “entrepreneurship” might be different in Kyrgyzstan compared to the US (and even among different regions in Kyrgyzstan), there is no question about its important role in developing a society and moving it forward. As the status of entrepreneurship grows and evolves here, I am excited to see its positive impact on Kyrgyz society.


Comments

What diverse and amazing sights you've seen Abhi, thanks for sharing them with us too. And I see you bought one of those traditional Kyrgyz hats!

Both official and civil society corruption is still an enormous problem in Kyrgyzstan. Nearly every aspect of Kyrgyz society - from gaining admission to universities, to passing university exams, to obtaining any kind of government employment or service - requires the payment of bribes. The same problem exists in other former Soviet republics in Central Asia. National and local government in Kyrgyzstan is operated like a mafia state that doles out services through a spider-web of protection rackets. One's ability to do business, and even have access to some international micro-funding programs (not Kiva), often depends on who you know or how much you are willing to pay. Failure to pay 'gratuities' to grease the wheels of government can result in a nightmare of bureaucratic red tape that makes trying to start or run a small business impossible. The larger the business the more intense the pressure. Foreigners who visit Kyrgyzstan as part of an international development program rarely see or experience the full extent of the problem. The professionals who regularly deal with international development workers are ashamed of the pervasiveness of corruption in Kyrgz society, but perceive it as a necessary part of the nation's economic survival. Many of them experienced first hand the extreme deprivation caused by the evaporation of jobs and salaries that followed the collapse of the Soviet Union. Many families lost life savings that were held in Soviet banks and are still reluctant to fully participate in the banking system or to trust government officials to treat them fairly. The Kyrgyz energy sector is one of the most corrupt in Kyrgyztan. It is filled with western investment bankers who came to Central Asia on well meaning international development projects and now work for or represent multinational corporations that collaborate with government officials in the exploitation of Kyrgyzstan's natural resources and the pollution of its environment for profit (the author of this article excluded). There is also a significant problem with respect to the protection of individual property rights under the rule of law. Entire businesses, including a hotel, have been confiscated by the Kyrgyz government without compensation to the owners. Anti-corruption programs sponsored by International donors and NGOs - which tend to focus on seminars, roundtable discussions and foreign exchange programs - barely scratch the surface of the problem. Ending corruption in Kyrgyzstan requires a mass infusion of capital to bolster public sector salaries while legislative reforms are enacted and take root. As long as the Kyrgyz economy is dependent on the supplementation of income through corruption it will be very difficult to develop a real culture of entrepeneurship that is the true foundation of any free market economy.

Thanks for your comment Koba. I totally agree with you about the problem of corruption in the country. Even though I have been in Kyrgyzstan only for a few months, I have definitely gotten a sense of how widespread it is. Similar to many other former Soviet republics, corruption is a systemic issue here that negatively impacts not only potential entrepreneurs, but also most other aspects of Kyrgyz society. Given the relatively low government salaries, many people tend to think of bribery almost as a necessity for survival. It is shocking when you compare salaries to food/housing prices. I think there needs to be a political solution to really reset the system (maybe something drastic, similar to the firing of the entire police force in Georgia in 2005), coupled with financial backing to increase wages. Having said that, I was really positively surprised by the enthusiasm for entrepreneurship (and the demand for new services) across the country, and I wanted to highlight that in my blog. Hopefully, corruption won't be as big a problem for small businesses that are just starting out compared to more established organizations. In addition, most of the younger people I talked to (specially potential entrepreneurs) understood the magnitude of the issue and really wished and pushed for anti-corruption political changes. Hopefully, as we have more young entrepreneurs visible on the national stage, there will be increasing political pressure to address this issue in a meaningful way. Given this youth energy, I am still optimistic, inspite of the existing issue of massive corruption, about the potential for real entrepreneurship in the country.

I have an interest in Kyrgyzstan and have been trying mainly to make loans to people in that country. I always wanted to visit it and perhaps cross the border,into China on a weekend and attend the famous fair there. I even have a dictionary in the language. However, as I got older, it became more difficult to imagine waking in the AM to hot yak milk and going outside the yurt for ones needs, etc. So I began to make loans. However, I have found it more and more difficult to find such loans for that country on Kiva. Time and again I have been told that there are "no available loans for that country" It is usually the case that when a loan is shown as repaid, there are several new loans listed, for the same country, by the company that is sponsoring such loans. It has been my experience that one has to look again and again for loans for Kyrgyzstan. I wish that it was as easy to locate loans for that country on your site. I did enjoy this commentary on the country and insights into loans made there and those who received them.

small article for your consideration Young Social Entrepreneurs Implement Award-winning Projects Mobilising the enthusiasm and creativity of youth to address social issues through entrepreneurship is an effective way to engage youth in their communities and build critical leadership skills. In a series of workshops held across the Kyrgyz Republic, youth were invited to submit project proposals addressing critical needs in their communities in creative ways. Attended by hundreds of participants between the ages of 16 and 30, the workshops generated a response of 218 proposals. Meder Usupbekov had been thinking about an idea to improve the quality of life for people with disabilities in his home town of Naryn, but was not sure how to do it. After attending the Change the World Around You! workshop, Meder, 26, was inspired to write a proposal on building wheelchair accessible ramps to major public institutions. Coca-Cola grantee, Azamat Akbarov’s Our Future in Our Hands initiative is presented to Kyrgyz Republic President Almazbek Atambayev (centre). Sewing workshop students from Naryn State University who work on the project look on. Meder’s proposal was among the 26 most promising that were selected. He and the other winning proposal writers were invited to attend a three-week training on social entrepreneurship facilitated by UCA’s School of Professional and Continuing Education (SPCE) at its Learning Centre in Bishkek. “SPCE is in the business of providing training that corresponds to community needs. This unique social entrepreneurship training was designed to help these young innovators transform their great ideas into workable realities. SPCE has the experience and flexibility to deliver this kind of training, which will immediately help participants build and apply skills, while enhancing their qualifications for future employment,” said SPCE Director, Gulnara Djunushalieva. The SPCE course covered basic social entrepreneurial principles, social marketing, business communication and negotiation, information technology and business planning for social projects. The course provided participants with the information and guidance they needed to move to the next step in the competition – refining, strengthening and defending their original proposals. “This was my first time writing a project proposal, and the training really helped. It was also during this time that I realised the importance of addressing unemployment, especially for youth,” said participant Azamat Akbarov from Naryn town. After the training, the finalists defended their business plans to an independent selection committee. Nine winners were selected, and each received up to $3,000 to implement their projects. The selected projects are testimony to the range of creativity and enterprise among youth in the Kyrgyz Republic. Azamat Akbarov’s Our Future in Our Hands initiative in Naryn town created unique opportunities for non-resident students to increase their skills and their income. The project facilitated the creation of employment opportunities at a baby clothing shop for rural students enrolled in the Apparel Design Programme of Naryn Agrarian Technical College at Naryn State University. Other projects built facilities to improve the quality of life of community members. Mirgul Alimjanova’s Playground Construction project in Batken resulted in a new playground to increase safe outdoor activities for families. Meder Usupbekov’s Access Ramps for People with Disabilities dream is now a reality and ramps are being built to enable wheelchair access to important public services in Naryn town, such as health and education facilities. Mirgul Alimjanova’s (right) “Playground Construction” project in Batken is officially inaugurated by local children in the presence of Mayor Dzhalalov Janybek, Vice Mayor Ryskulova Gulsun (left) and Governor Razakov Jenish. Art and social change are at the heart of two projects. Nadejda Domasheva’s Bride-Kidnapping and Early Marriages is a Crime project in the towns of Kara Kulja, Uzgen, Naukat, Aravan and Osh City is creating awareness of the impact of bride-kidnapping and early marriage using innovative forum theatre performances, in which audiences decide the plot direction. Aisuluu Kudaiberdieva’s Dance for Youth with Disabilities initiative is training youth with physical disabilities to dance and creating dance groups in Bishkek. The project aims to build strength and confidence in these youth while creating social opportunities for them. Two projects in Bishkek addressed environmental issues with an entrepreneurial spirit. Elena Shilonosova’s Green Bags Production project trained youth from an orphanage to design and sew eco-bags, which will be sold in prominent supermarkets and shops. Marsbek Tezekov’s Recycling Paper project involved implementing waste separation systems in schools and selling paper to local recycling companies to generate income to buy textbooks for students. Finally, two projects in Bishkek used information technology to create useful tools for families. Shumkarbek Adilbek uulu’s Website for Financial Literacy provides families with educational resources to help them develop and manage their household budget, engage in financial planning and manage their loans. Adilet Murzaliev’s Online Student Assessment Tools include a database and website for parents to track their children’s academic performance, and encourage parental involvement. “Currently I am working with three schools in Bishkek and strongly encourage parents to be involved in the process. My next step is to create a wider audience and encourage the participation of universities in Bishkek,” said Adilet. In addition to implementing their projects, the Change the World Around You! winners have further engaged with their communities in related activities. For example, Meder Usubekov’s access ramp project has received support from both state bodies and the national parliament, with parliamentarians attending the opening ceremony and acknowledging the importance of this issue in parliament sessions. Elena Shilonosova developed marketing presentations on eco-bags to potential vendors and Mirgul Alimjanov participated in the opening ceremony for the newly constructed playground. The ceremony was attended by officials, but the guests of honour were the children, said Mirgul, “When the selection committee approved my business plan, I was happy. This playground was really needed in Batken and is dedicated to the children. At the opening, we had many young guests.” Winner and grant recipient, Meder Usupbekov observed that the project gave him an opportunity to do something that benefits his community. It also made him think differently about social action; “It has made me realise that one person can make a tangible contribution to improve the world around them and positively affect the lives of others.” The ‘Change the World!’ contest was implemented by the University of Central Asia.

Add Your Comments

Abhi is interested in leveraging technology to empower local communities with financial literacy and economic development. He completed his undergraduate studies from Carleton College with a degree in Physics and Computer Science. After graduating from college, he has been working at an investment management firm in New York, focusing on portfolio risk analysis. Having lived in and experienced completely different cultures of Nepal, rural Midwest, and New York City, he also really appreciates the importance of experiencing new cultures. Having finished his first fellowship in Kyrgyzstan, he is excited to be continue with partners in the Ukraine.