Can you tell us about
the development of Ineximbank and how it survived
the process of restructure that the banking sector
underwent here, what have been the major changes
that have occurred and how did they affect your
bank?
Practically it was not a re-structurization. At
some time the charter capital of the bank was 50
million sons, and we increased it up to 100, also
the new shareholders had joined in. Bank faced the
new tasks. Being a universal bank, Inexim Bank is
doing all sorts of operations, which can hold any
other banking institution in the country. It is
work with deposits, crediting, work with acridities,
payment procedures, plastic cards, work in the Western
Union system, travelers cheques; well, all the operations
which are allowed in our republic. Then bank acquired
new characteristics, and mainly because we changed
the name of the bank, now it's Investing-Exporting
Inexim Bank. We stared working with EBRD, with World
Bank in crediting line, with EBRD we work in terms
of market financing and micro crediting, due to
that changes the sector of the clientele we serve
god bigger and some of the Bank's functions changed.
But I can say that the main purpose of the bank
did not change, we just started working in a more
strategically aimed at the export and import operations.
Our country is very young only 11 years of independence,
and the bank is young too, we are only 6 years old,
but at that period of time we covered a very long
way, we learned to learn fast and catch up, because
we got into the global world and must not stay out
boat. Due to this reasons I want to say that from
the very beginning we were holding an international
audit of our bank (I understand there are a lot
of negative about the Author Andersen company right
now, but it was one of the first 5 leading auditing
companies), but now we are working with Deloit and
Tush (their main office is in London and the representative
body in Alma-Aty). If to look inside of the country,
our country got it's independence, of course it
has a lot of positive aspects, but from the other
side there were a lot (well some negative aspects.
In positive aspect there is nothing better then
the independence of the country, person, but it
also a great responsibility. It can be said about
the president of the country, about his policy,
because he turned out to be a very liberal person
and gave the opportunity for the small enterprises
to develop, it also can be said about the banking
system. During this period a lot of new and private
banks opened in the country, there are practically
no governmental banks left. But we also got a lot
of problems in the banking sector right now, a lot
of banks went bankrupt, a lot of at the verge of
bankruptcy, in my opinion it all about the bad management
of the banks. In my point of view, if I work in
the bank for 5-10 years, I want to know that in
100 years this bank will work; I do not want it
to be a temporary thing.
What do you consider Inexim's main competitive
advantages in regards to other banks; competition
of course has drastically decreased in Kyrgyzstan
in terms of the banking sector. What do you think
your bank offers that others are not so good at?
You understand that our country is very small,
we have very small quantity of banks, less than
20 banks, but at the same time, yes we have competition,
we have some sort of struggle over the client,
but at the same time, every bank has it's own
niche. There are big banks with the set network
in the territory of Kyrgyzstan, there are medium
size banks, which work in Bishkek and other towns,
and there are small banks, which cover some small
sectors of economy. In this situation we get nothing
without competition, every one of us is trying
to get the best client; there is a battle for
a client, but not covered one or not fair, it's
open and all of the banks offer the best services
to the client, in order to attract him. Right
now in Kyrgyzstan people talk a lot about the
situation that Kyrgyz Industrial Bank (opened
on the behalf of Kyrgyz government, EDRB and Age
Han Fond) and one of the biggest Kazakh banks
KazKomercBank bought the shares of Auto Bank,
a lot of people say that there is no way our small
banks can compete with such big ones, and will
take over the market. However, I think that the
competition does not depend on the size of the
bank, but on its work. One of my good friend said
to me once that now is not the time of big or
small companies, it's a time of prompt companies.
If we are on time to catch up and to react on
what is going at the market, we are going to be
ahead, if not, we'll stay at the same level.
What is the current level of capital that your
bank has? How much in deposits?
The capital of the bank right now is 100 soms,
and we have obligations for merely 200 millions
soms. It was the time when we were working only
with the bank's capital, but today we must start
to increase the amount of work with the deposits
base, because of some of the negative aspects
in the whole banking system, we lost some of the
deposits. Today som is pretty stable, there are
some positive numbers in the growth of GDP, and
the most important is that we got political stability
later, which always influenced and influences
on the banking system, which is like the blood
system to the whole economy of the country. I
was working at the National Bank, worked as a
chairman of the supervision department, and when
I only started to work, I was told, that I should
not be supervising I must be a businessman. Well
I am a businessman, but I do not forget the lessons
of supervising, and one of them is too be extremely
cautious when you are working with money. At that
point of the time our economy is bind with the
world system, and some of the negative aspects,
which happen in the world market, affect us too.
There was a very good increase in our economy
and especially banking system, in 1995-96, but
the Russian crisis(so-called Black Tuesday) in
1998, affected us badly, and we are still connected
to Russia in a lot of aspects, and this black
day, when the dollar rate increased very high
comparing to the rubble, had the same effect in
Kyrgyzstan, and especially influenced the banking
sector. And only the last year our economy somewhat
stabilized. This year we have some positive changes,
banks started to pay attention to the different
sectors, the process of crediting improved. But
there are still a lot of the problems, and the
most important is that they all are resolvable.
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I am aware that you
are working with the European Bank of Reconstruction
and Development, as I understand you provide credit
lines for small and medium size enterprises, particularly
in the industrial and light manufacturing sector.
Can you tell us in which ways you are stimulating
exports in this way and assisting the EBRD?
You understand that it all depends on the bank,
on the people who work there on the process of
work. There is a particular level when we are
working with the big enterprises, give credit
to the big enterprises but also we give credit
to the medium size companies. But our main task
for today is micro crediting. And we are always
glad when people come to us and say that they
want to produce something, that will substitute
imported products, but also produce some possible
exports, that can be sold outside of the country.
Which sectors do you think offer the best
potential for surviving in globalized economy
we are living in today?
I one more time want to say that we are very
small country surrounded by such big neighbors,
with which is really hard to compete. But we have
processing industry in the sector of agriculture,
light industry, there are also some big enterprises
left from the soviet times, like mining processing
industry, those already have the structure and
the base, and i think we should let this companies
to stand up and support them, then they start
work and will produce products for local use and
maybe export. It is very hard to compete with
China, this country has a lot of potential, but
our market has it's own particularly specified
sectors, the products of which is both needed
at home and goes for export. There is a good example.
There is a very small village in the mountains,
not far away from Bishkek, during the soviet times
there was a big wine producing plant, now on the
base of it there is a small apple-juice producing
plant, there are a very small quantity of the
produced product, but it all is exported to the
Germany. Have you been to the mountains?
You saw the nature, the ecology. When you are
at the mountain river you can just take the water
n\and drink it, it's so clean, the same with the
apples from the tree, it do not contain any harmful
chemicals. At that time we have a completely forgotten
oblast' Naryn, where the cattle breading always
took place. From the old time Naryn was a place
for horse, cattle and sheep breading.
The meat of those animals doesn't contain any
biological stimulants, and there is no danger
of cow madness. But there are not only natural
resources in this country, we ecologically clean
and save zones. There is also one very big company-Bitel
GSM, the most progressive one I think. And this
company can be call one of the prompt ones.
In terms of foreign investment is your bank
ready to provide assistance to foreign investors
interested in operating here: whether is interested
in supervising finances, expertise or, perhaps,
going into join-venture partnership with them?
You understand if before EBRD was working only
with the government, now they started to work
with the small companies. The big problem we have,
like all other post soviet republics, is the importance
of the officials. All the good starts and initiatives
meet an obstacle in the face of the officials,
which in their self interest or because some other
reason, do not think about the interest of the
country. Due to that reason our president organized
the agency of attracting the foreign investors
into the country. Joomart Otorbaev, the ex-prime
minister of the country, is working in this committee
and he does everything possible to attract foreigners
to work here. Here are a lot of opportunities
to finance and receive visible outcome.
If we look at the legal process of investing,
I can say that our law is very liberal to the
investors. We have a lot of new private enterprises
which can work with foreign investors, the laws
we have are very liberal, but when we have somewhat
centered attempt to attract the investor, the
only official can be in the place, but if two
companies are working together, there must not
be any problems.
What would you tell investors about Kyrgyzstan,
how would you describe it, and what would you
say to convince investors to come here?
I would like to advise them to come here and
see, examine the sectors of tourism, Issyk-Kul,
our mountains. If someone is interested in the
industrial sector, they should look at the processing
industry, there are several big sugar processing
plant, wool processing and also cotton processing
plants.
Our readers are always interested in the people
we interview, mainly because they are the ones
who run the business that lead the economy of
the country. In that respect could you tell us
about yourself. You just mentioned in the very
beginning that you were just appointed in this
position, so if you could brief us on your professional
career and what you feel most satisfied with your
work also perhaps, what do you see this bank become
while you are in this position?
This is a very good question. If to speak for
myself, I grew up in the family of clerks. My
father at first was just an economist and then
he reached the chair of the Minister of finance
of the country. When Kyrgyzstan got independent
and Askar Akaev became a president, he appointed
my father as a first minister of finances I am
very proud of my father, he brought me up well,
and I think that it doesn't matter how much I'll
achieve, I would never be able to cover all that
my parents gave me. I graduated form from the
Leningrad Financing-Economic Institute; there
I defended my thesis in economics. I was working
as economist in the governmental agency for the
supervision of securities and from 1992 I am working
in the banking system. I was working in AKB, in
the National Bank, in Eridan, in the Financial
Committee for the credit-union support. And now
I am working in the Inexim Bank. And honestly
speaking I am very glad, I would like to learn
more and deepen my knowledge. I want the bank
I am working in to be reliable and stable, I want
people in many years say that Inexim bank is a
very stable Bank
I also would wish everyone well fare and peace,
the most important is well fare, and everything
else is in the hands of god and people themselves.
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Mr. Murat
Kunakunov