Kyrgyzstan: farmers will be able to buy farm machinery through Islamic financing — 6% a year, up to 7 years
The Ministry of Water Resources, Agriculture and Processing Industry of Kyrgyzstan reported the signing of an agency agreement under an Islamic Development Bank project aimed at agricultural mechanization. Through two state banks, $44.61 million is being provided to buy modern machinery and equipment; the agreement became known on November 4.
Key figures
- $44.61M for machinery
- 6% per year
- Term up to 7 years
- Murabaha and Ijara
- Via two Kyrgyz banks
- Check application terms
What changed
A three-party agency agreement has been signed between the Ministry of Water Resources, Agriculture and Processing Industry, the Ministry of Finance and two banks — ABank and Eldik Bank. It allows the Islamic Development Bank project KGZ-1037 to be delivered through the Islamic windows of these banks. The aim is to mechanize agriculture and renew the machinery fleet: entrepreneurs and individuals in Kyrgyzstan will be able to buy modern agricultural machinery and equipment.
In figures
Main parameters of the program, according to the ministry:
- Financing volume — $44.61 million, provided to two state commercial banks.
- Rate of return — 6% per year.
- Financing term — up to 7 years.
- Murabaha — machinery sold in installments with a fixed markup.
- Ijara muntahia bittamlik — machinery leased with a later buyout.
What this means for a buyer
For a farm this is another source of long-term financing for machinery: a term of up to seven years lets you spread payments over several seasons, and the 6% annual rate makes planning simpler. However, the ministry's announcement does not state the application procedure, the start date for applications, the cap per borrower, the down payment or the list of eligible machinery. Before planning the purchase of a combine, tractor or sprayer, check these terms with the banks and the ministry — including whether used machinery from abroad qualifies under the program.
Where to apply
Financing is issued through the Islamic windows of ABank and Eldik Bank — that is where to go with questions and an application. The ministry had not disclosed detailed terms at the time of publication, so follow news from the ministry and the banks.
Machinery for your farm
John Deere combines, tractors and sprayers from the USA with delivery to Kyrgyzstan — on our website.