Small and Medium Enterprises Development in Alai and Chon Alai Districts of Osh oblast, Kyrgyzstan

Project completed

The political turmoil and conflicts in the south of the country in 2010 have unveiled the problem of unbalanced regional development. The government admits the need to develop the regions economically but lacks resources. Therefore the role of the private sector as the main driving force to generate jobs in rural areas, is important. To this end SDC has launched project on small and medium sized enterprises development in the poorest districts - Alai and Chon Alai. These two districts are known to have been engaged in the conflicts in Osh in 2010.

Country/region Topic Period Budget
Kyrgyzstan
Employment & economic development
Agriculture & food security
SME development
Agricultural services & market
01.05.2014 - 31.05.2018
CHF 3'610'000
Background

The economic mainstay of the region is increasing but very low productivity livestock. Beside livestock, fodder, potatoes, fruit and vegetable production create some seasonal jobs. Lack of business prospects and increasing unemployment pushed young men from Alai and Chon Alai to search for better perspectives in other regions of Kyrgyzstan or abroad. These districts have one of the least industrial outputs in Kyrgyzstan with limited access to government services and to donor aid. This is why the present project shall contribute to the creation of employment in the Southern region of Alay and Chon Alay through the sustainable expansion and diversification of businesses to ensure economic growth, supporting transition processes and hence contributing to reducing tensions.

Objectives

The project vision is that poverty in Alai and Chon Alai is reduced, in particular for women and youth, thus diminishing rural-urban inequalities and giving youth a more positive perception of a future for them in the region. The Project overall objective is to reduce poverty by re-orientating livestock farming towards farming entrepreneurship and by fostering local business initiatives. The project approach is to boost development of Small and Medium Enterprises (formal and informal) through improved functionality of existing value chains with stronger focus on livestock processing. It follows a “Making markets work for the Poor” (M4P) approach.

Target groups
  • Rural population of both districts, especially Women and Youth
  • Innovative and dynamic leading private entrepreneurs, investors
  • All other micro and small business enterprises (formal and informal)
  • Diversified service providers and Market regulators: associations of the Business and Local self-governments, representations of the national governments, developers of standards and others 
Medium-term outcomes
  • Increased entrepreneurship of selected livestock farming generates additional employment and income
  • Local small and medium enterprises generate increased employment and income
  • Project stakeholders are aware of systemic constraints and of the steps that are needed at policy and market level to support SME development in Alai and Chon-Alai 
Results

Results from previous phases:  

The findings of the inception phase have overall confirmed the project orientations suggested in the technical proposal and preparatory studies. Pre-selected subsectors have been reviewed through an assessment based on a series of criteria relating to sustainable market demand, potential for high employment and income generating, in particular for youth and women, and conflict reduction potential, which led to the exclusion, or at least, postponement of the less promising ones. CSPM strategy has been developed, and the conflict sensitivity of the proposed interventions has been reviewed.


Directorate/federal office responsible SDC
Credit area Swiss cooperation with Eastern Europe
Project partners Contract partner
Private sector
  • HELVETAS Swiss Intercooperation
  • Swiss Private Sector
  • Helvetas-Swiss Intercooperation, as lead of a consortium composed of Helvetas-Swiss InterCooperation and the Aga Khan Foundation. Consortium leader: Helvetas Swiss Intercooperation, an international NGO with office in Kyrgyzstan. Consortium partner: Aga Khan Foundation Kyrgyzstan. Co-Facilitators:


Budget Current phase Swiss budget CHF   3'610'000 Swiss disbursement to date CHF   3'210'936
Project phases Phase 2 01.06.2018 - 31.05.2022   (Current phase)

Phase 1 01.05.2014 - 31.05.2018   (Completed)