Analysis of the competitiveness of small and medium-sized enterprises in the Kyrgyz Republic (Challenges and solution proposals)

The aim of the study is to identify the problems of SMEs operating in Kyrgyzstan and to offer suggestions for resolving these problems. Most of the researches on SMEs in Kyrgyzstan have investigated financing and management problems. However, this study is needed because the number of studies on the problems of SMEs is few in the literature. In the research's first chapter, general information about the Kyrgyz Republic was given, the country's independence and post independence periods are briefly explained as well. Also during the privatization period of Kyrgyzstan, foreign trade and the most important sectors like agriculture, industry, and tourism were included in the development plans. In the second chapter of the study, the definition of SMEs in Kyrgyzstan, the advantages and disadvantages of SMEs are discussed. Factors affecting the competitiveness of SMEs, level of development of SMEs and support given by the state are examined. In the third chapter, the problems encountered by SMEs in Kyrgyzstan were identified, also findings were assessed in order to come accross the issues. The research is designed as a qualitative study. Interview method was chosen as the data collection tool in the research. Interviews were held with 6 companies operating in Kyrgyzstan within the framework of the research questions. As results of the performed analyzes, malpractice, lack of government assistance, complicated tax administration, lack of state guarantees for property protection, financial insufficiency, inefficiency of credits, effect of competitors in shadow economy, the marketing and selling of products problems, the state organs interfering with SMEs; electricity, gas, water and sewage related problems; inadequacy of materials; problems related to raw materials and materials low quality and similar are the essential founded issues. Suggestions are presented from the outcomes of the analyzes made. Considering the characteristics of SMEs; business incubators should be opened to expand the legal and regulatory framework, to reduce taxation, to open logistics centers and to support SME activities from their first stage.