Despite recent economic growth, poverty remains a challenge in Kyrgyzstan, with 25.7% of the population living below the national poverty line.

To help vulnerable households achieve greater financial stability, the government initiated the Social Contract Program, which supports the creation of microbusinesses, small businesses that are usually operated by individuals or families and require relatively low startup costs. This article explores how the Social Contract Program is helping families launch microbusinesses, increase household incomes and support poverty reduction in Kyrgyzstan.

Social Contract Program

Established in 2022, the Ministry of Labor, Social Security and Migration launched Kyrgyzstan’s Social Contract Program. The program targets struggling households with viable business ideas. It provides benefits such as cash grants and a support package that includes agricultural training, financial literacy training, business plan development, social services and mentoring. Participants have used the grants to launch a variety of microbusinesses, including livestock breeding, dairy production, sewing services, beekeeping and greenhouse farming.

The Social Contract Program has significantly impacted the growth of microbusinesses. More than 35,226 families received a total of 3.5 billion KGS to start microbusinesses since its launch in 2022. The program’s continued expansion demonstrates its potential to create sustainable sources of income for vulnerable households across Kyrgyzstan.

Impact on Poverty Reduction

The Social Contract Program has expanded significantly since its launch, helping thousands of low-income households create sustainable sources of income. Before the program was implemented nationwide, the Ministry of Labor, Social Security and Migration piloted the initiative in two districts. The pilot supported 100 families, each receiving a grant of 100,000 KGS (approximately $1,200) to start a business (p. 6). By May 2022, 62 of the participating families had already begun generating income from their enterprises.

Following the success of the pilot program, the government expanded the initiative to 2,800 families in 2022 and 10,000 families in 2023 (p. 7-8). The program has continued to grow, reaching more than 35,226 families and distributing a total of 3.5 billion KGS to support the creation of microbusinesses.

The Social Contract Program has also expanded economic opportunities for women in Kyrgyzstan. In 2025, 10,902 of the program’s participants were women. Many of them have used grants to launch businesses in agriculture, manufacturing, trade and services, showing how the program helps women generate independent incomes and contribute to their households’ financial stability.

By providing vulnerable households with the resources needed to start businesses, the Social Contract Program is creating new opportunities for long-term economic growth and poverty reduction in Kyrgyzstan.

Looking Ahead

To fight economic instability, the Social Contract Program is helping vulnerable households across Kyrgyzstan build more stable futures through entrepreneurship. By providing grants, business training and mentorship, the program allows participants to establish microbusinesses and generate sustainable sources of income. Its rapid expansion and strong participation rates demonstrate its potential to improve livelihoods and create new economic opportunities. As the program continues to grow, it plays an increasingly important role in poverty reduction in Kyrgyzstan by helping families achieve greater financial independence and long-term stability.

– Michelle Kurniali

Michelle is based in Dallas, TX, USA and focuses on Good News and Technology for The Borgen Project.

Photo: Flickr