A glimpse into Entrepreneurship in Kyrgyzstan
Abhishesh Adhikari | KF19 | Kyrgyzstan
One of the most exciting things about Kyrgyzstan is the potential for the growth of entrepreneurship. Over the last few months, I had the opportunity to travel all across this country and meet a wide variety of borrowers and potential entrepreneurs. From young college students in Bishkek to farmers in the remote regions around Naryn, shopkeepers in violence affected areas of Osh to livestock owners in Batken. Just twenty years after the fall of the Soviet Union, there seems to be a lot of enthusiasm here for starting up small businesses.
Looking at the demographics and the challenges involved, I would categorize Kyrgyz entrepreneurs into two major categories. First, there are the young college students and graduates from around Bishkek and other major cities who are interested in starting service-oriented businesses. Second, there are entrepreneurs from the more remote regions who want to start new farms and livestock businesses.
Startups in Bishkek and other cities
When people think of a “Startup” in the United States, they mostly think of technology related companies. This is probably because a lot of the innovation in the US revolves around making existing processes more efficient. However, after living in Bishkek for more than two month, I can see a lot of potential here for startups that aren’t necessarily technology related. The country lacks a lot of services that could make people’s lives a lot easier. For instance, a few times every week when I take out my trash, I need to walk about 10 minutes to get to the nearest dumpster. How great would it be if somebody here started a trash collection business?
Fortunately, there are a lot of young people in the country who are enthusiastic about starting such businesses. Given this enthusiasm, one of my main goals here is to help launch a new Startup Loan product in which Kiva and Bai Tushum are going to collaborate. This new loan product is designed to help young entrepreneurs with limited business experience.
Last month, Kyrgyzstan held its first ever Startup Weekend event in Bishkek. As a part of laying the groundwork for our Startup Loan Product, I gave a presentation there about Kiva, entrepreneurship, and how we hope to use this new loan product to help potential entrepreneurs. The event consisted of about 80 young entrepreneurs, and many other investors and influential members of Kyrgyz society.
All 80 entrepreneurs gave one-minute pitches about their startup ideas. They were pretty diverse and included things like starting a youth oriented magazine, a turkey farm, a food delivery business, and even building a soccer field (Soccer is very popular in Kyrgyzstan!)
Everybody got to vote in order to select the 15 best ideas. The remaining entrepreneurs joined one of these selected projects and worked on further developing them over the weekend. I had the opportunity to spend time with some of these teams to critique and help refine their ideas. This gave me a much better understanding of the opportunities and challenges facing Kyrgyz entrepreneurs. At the end of the weekend, the groups gave their final presentations and the top 5 ideas were rewarded by investors and sponsors.
Interestingly enough, one of the groups had the idea of a trash collection business! The young woman leading the group was a very busy college student with a part-time job, and she was using whatever time she had left to start this new business.
We discussed the logistics, timeframe, cash flows, and ways to move this forward. This potential business would not only be profitable, but also very socially impactful. Currently in Kyrgyzstan, people don’t really recycle. If her business takes hold, she could incentivize her clients to start recycling, and sell these recyclable goods to manufacturers: profitable and at the same time extremely socially impactful.
With some basic support in business training and financing, I think a lot of these projects could really grow to have a positive influence in Kyrgyz society.
Startups in the remote regions
Entrepreneurship outside of Bishkek takes a slightly different form. While most startups ideas around Bishkek focus on service-oriented businesses, people in the more remote regions primarily work on agriculture and raising livestock.
Some of the borrowers that I met actually survived solely on what they produced in their farms and through their livestock. While they are mostly self-sustainable, they have to rely on insufficient government welfare if their harvest doesn’t go well. However, a lot of them could get some financing in order to expand their farm/livestock and produce enough to sell and turn it into a profitable venture.
I also met a lot of borrowers in the villages who wanted to open up small shops for trading. They had ideas about selling a wide variety of products in their shops: groceries, meat products, household items, winter clothes, and many more. Most of the villages have a nearby marketplace (called bazaars), where they can easily open up stalls to start selling.
Another area of potential entrepreneurship in Kyrgyzstan is the production of craftwork. Hats, carpets, towels, and clothes with intricate designs are very popular in Kyrgyzstan. It is a pretty competitive industry, but the barriers to entry aren’t that high. Anyone with a good sense of design and skilled in craftwork can sell a lot of these items. With just about 500 dollars, one can gather all the raw materials and equipment necessary to start such a business. One of the women that I met near Osh specialized in the production of hats, and produced about 40 hats every day. The demand for her product was so high that she recently hired a part-time employee to help increase production.
While the concept of “entrepreneurship” might be different in Kyrgyzstan compared to the US (and even among different regions in Kyrgyzstan), there is no question about its important role in developing a society and moving it forward. As the status of entrepreneurship grows and evolves here, I am excited to see its positive impact on Kyrgyz society.