Kompanion Bank blends capital and business knowledge to create self-sustainable futures
Abdil Sydygaliev and Kymbat Kochmonova have planted 500 Red Delicious apple trees. They used to farm livestock but changed to apples because it’s much easier to handle.
Kompanion Bank was established in 2004 to provide loans to small scale farmers, livestock herders and shepherds in Kyrgyzstan. It has been an Oikocredit partner since 2007. However, Kompanion is a bank with a difference because it not only provides micro loans to its clients but also offers them free business development training and technical assistance in order to promote sustainable agriculture and natural resource management.
Ulanbek Termechikov, Kompanion Bank CEO, explains the rationale behind this innovative approach. “We know that a market economy is built on access to financial services,” he says. “But following the collapse of the Soviet Union, this wasn’t an option for most people and it was particularly difficult in rural areas where there were no banks at all. Added to this, people didn’t know, or understand, how to farm independently. In these circumstances, it would have been irresponsible for us to go on simply providing funding to our clients. So, in 2008, we began to offer them business development training and technical assistance as well.”
Building knowledge through trust
Initially sceptical, Kompanion’s clients soon realized the value of the training sessions. Interest grew, and over the next five years Kompanion agricultural specialists provided more than 12,000 training sessions reaching over 3,000 households in half of the villages in Kyrgyzstan. Today Kompanion employs 32 agronomists and vets who run 10 training sessions each season, as well as providing ad hoc consultation on how to run a small agricultural enterprise.
Ulanbek Termechikov, CEO of Kompanion Bank says: “Once people started to trust us and saw the results of the projects, it became self-supporting.”
Long-term investment for long-term growth
The Eco Garden Initiative is a three-year training programme that teaches clients how to grow apples in the area around Issyk-Kul lake. It is a great example of the impact of Kompanion’s blend of financial support and business development training.
In 2008, Alybaev Duishonbu (49) set up an orchard in Chon Sary village but the apple and apricot trees he planted did not thrive. After hearing about the Eco Garden Initiative, Duishonbu visited his local Kompanion office to find out more. Afterwards, he joined a group of 30 farmers who share their knowledge and experience with each other, taking out loans and attending training sessions together.
Kompanion agronomist, Kenesh Bukabaev, taught the group how to graft trees to create better varieties as well as advising them to use bigger trees to avoid soil erosion and to widen branches to improve growth.
Kenesh also visited Duishonbu’s orchard and introduced him to new agro-technical methods including swapping apple trees for apricot trees (which grow better in the rocky soil), creating a nursery, digging bigger holes for seedlings and using organic fertilizer.
Supporting self-sustainable livelihoods
Individual project results are also impressive. Nazgul Sydygalieva (49) is an example of the thousands of clients who have benefitted from Kompanion’s training sessions. Nazgul owns a hen house in Balykchy town. She is extremely proud of the house which holds her 450 chickens and which she built thanks to the help of Kompanion vet, Talgarbek Asanakunov. Before they owned their hen house, Nazgul and her husband used the proceeds from their apple orchards and livestock to provide for their family but they worried about the costs of higher education. Now, thanks to the money they make from selling their eggs, they are able to afford to send their five children to Bishkek to study.
Business based on results
Kompanion’s impact measurement system enables the bank to understand whether it is meeting its goal of enabling its clients to improve their lives.
”2014 data showed nearly half of the clients we support through our resources and training have improved their lives,” says Ulanbek. “That is a good result. It means we are doing something positive and it’s what inspires us to do more!”
Kompanion Bank has received two Oikocredit loans: one in local currency of 328,670,300 KGS (about € 4,500,000) and one of US$ 1,000,000.