What was the reason
that motivated Aga Kahn Fund and the European Bank
for Reconstruction and Development to establish
this bank? Aside from perhaps giving guidelines
to the rest of the banks here what was and is the
objective?
The company was registered in January 2001. We
got our license from the National Bank on July
2001. We just finished our first year of activity.
We are a local commercial bank; we can say that
it is a special bank. The capital fund in a commercial
bank is usually 100 million som, which is about
2 million USD. The amount of our capital is less
than 2 million USD. It is difficult to be absolutely
confident of financial security. Our main shareholders
are financial institutions in the public sector.
As for the private sectors, they need financing
from the banks. International financial institutions
are beginning to consider Kyrgyzstan and they
see lot of opportunities here. We have very strict
local governance and it is difficult for us, being
a small-size bank. We are trying to be a good
example in this country and I think we contribute
to the banking sector as well.
We interviewed Mr. Otorbaev, him as the top
official in creating a favorable investment climate
and knowing the potential sectors, he pointed
out that the economy of Kyrgyzstan should be directed
towards service, banking and other sectors. There
is a great potential to provide services to the
whole region. From my point of view, it is a little
bit early to make such predictions but what is
your opinion on it and what reason would you provide?
We have to oversee what is going to be a prospect
in the future. They are now building a new system
and so far the National Bank is a pretty reasonable
bank but still not at the right level. We have
to make sure that the banking sector contributes
to the development of the economy in a long run.
Banking sector in Kyrgyzstan is important; it
should be a service center for all Asian companies.
This can actually be a very nice center for banking
but there are problems in the system but maybe
in a long time, it will be an ideal place to be.
Bishkek has some problems and at the moment this
country does not have adequate info structure.
Talking about financing the industrial sector
to improve economy here, I would like to quote
Young Chain, your Chairman of the Board who hopes
that focus on corporate sector will contribute
to the growth and stimulation of the economy.
What sort of projects are financing?
As you know, most of the industries here are
previously state-owned companies so we are working
on the modernization of some of them. A lot of
these companies are looking for investment. We
funded a number of projects in IT sector, retail
corporation division sector and some projects,
which are generated in banking.
I would like you to talk some about of the
environmental procedures that the bank wants or
IBRD requested from you. What sort of criteria
are you utilizing to determine whether the activities
are not very environmental and contributing?
We have come together and agreed on a profile,
which meets everybody's requirements. Yes, at
first we did not qualify for the IBRD requirements
but later we came to an agreement.
Do you plan to open another branch, perhaps
in Osh?
I don't think we will open a new branch, but first
of all, it depends on whether it will be a commercial
bank or not. If we decide on that, we might consider
opening another branch. Actually, it is our shareholder's
decision, not ours. We do have some provision to
extend our bank as a regional bank. Also for the
nature of our bank, I don't think it is necessary
to build a network because we can cover the country
without it as well. |
Do have any figures
of how profitable you will be once you reach the
necessary level?
Our bank is not profitable yet. Foreign investors
come to the market economy and only then they
consider it. Not next year but in a certain period
of time our interest income will be around 60%,
which is 10 times more than the one in the National
Bank. Once the region gets accustomed to a certain
method, we can make more progress. Our interest
rate today is rather small and reasonable in a
comparison with other commercial banks here. Our
shareholders don't want to damage the banking
sector; they want to provide something that is
not being provided. A large stock of small loans
becomes profitable and so we put in our minimum.
What is your opinion on Kyrgyz stock exchange?
It could be a very good way of financing the industrial
sector and a number of other corporations but
it is not very well developed. There are rumors
that there is large corruption here. What do you
think?
It should be developed. Honestly, it is very
difficult to find people who would invest money
in the capital markets. There is a big problem
with the country and economy itself. The size
of the country is not big enough for international
companies to function here, but it is definitely
good for small companies and enterprises.
What do you think about the investment climate
here? Do you think that Ms. Akaev and ministers
will be able to provide and match more investors
to Kyrgyzstan? Do you think things are improving
in the banking sector?
I don't want to get too political but I think
that companies realize that they need foreign
investment, that it is a plus to their system
and that they should be pointed at attracting
foreign investment, which is very important. Uzbekistan
and Kazakhstan have a base for foreign investment.
Foreigners come to Kyrgyzstan and see that there
is little investment to finance. Kyrgyzstan should
have some kind of a concept. As for the Central
Asian investment climate, system, laws and regulations,
I think they are improving to a better deal. I
hope investment will be increased but there are
some barriers and they are trying to break them
down.
We always like to learn about people running
these companies and financial institutions that
we introduce. You are the main decision makers.
Could you tell us a little bit about yourself,
your previous experience, your main challenges
and what do you think contributes to the bank
of Kyrgyzstan?
I have a very interesting experience in a banking
system. As you know, my banking career started
in the early 1970s. At that time the main responsibility
of Korean banks was to support the Korean government.
The banks had to sacrifice themselves to support
public sector, which resulted in the Asian crisis
in 1997. I worked as a manager in this banking
system. Later on, I went to the United States
of America where there is a great deal of banks.
Competition is very important for the banking
sector and it is very high in the States. Regulations
are very strict but all banks comply with these
regulations. I think it is very impressive.
Well, I feel that I founded a bank that contributes
to the economy here. We don't have such a strict
banking system as the one in Uzbekistan. This
is a very challenging but meaningful work.
|
Mr. Kwang-Young
Choi 