Methodological Guidelines for Filling Out the Periodic Regulatory Report of Microfinance Companies Operating in Accordance with Islamic Principles of Banking and Finance

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Date of creation: 2025-03-14

Appendix 1 to the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of 26.12.2014 No. 46/1

METHODOLOGICAL GUIDELINES

on filling out the periodic regulatory report of microfinance companies carrying out operations in accordance with Islamic principles of banking and finance

(amendments and additions approved by the Resolutions of the Supervisory Committee of the NBKR No. 36/1 dated 01.09.2016, No. 37/3 dated 05.10.2017, in the edition of the Resolution of the Supervisory Committee of the NBKR No. 06/2 dated 08.02.2018, No. 43/2 dated 30.12.2022, No. 13/1 dated 06.03.2025)

I.

GENERAL PROVISIONS

These Methodological Guidelines provide an explanation of the procedure for filling out the appendices to the Regulation "On the Periodic Regulatory Report of Microfinance Companies Carrying Out Operations in Accordance with Islamic Principles of Banking and Finance" (hereinafter referred to as the PRR), for the following sections:

1. title page;
2. Section 1 "Regulatory Report on Financial Position";
3. Section 2 "Report on Comprehensive Income";
4. Section 3 "Capital";
5. Section 4 "Information on overdue assets, asset classification and off-balance sheet obligations by risk degree";
6. Section 5 "Deposits";
7. Section 6 "Sensitivity analysis of assets and liabilities to changes in yield rates (GAP analysis)";
8. Section 7 "Changes in Special Provisions for Potential Losses and Losses (SPPULL)";
9. Section 8 "Risk Information";
10. Section 9 "Information on transactions with employees";
11. Section 10 "Information on compliance with economic standards";
12. Section 11 "Information on financing provided to clients";
13. Section 12 "Disclosures";
14. Section 13 "Report on foreign assets and liabilities";
15. Information on members of the Board of Directors, the Management Board, major founders (shareholders), and members of the Shariah Council of the MFC;
16. Information on individual officials of the company;
17. Basic information on the MFC, information on branches/representatives/structural units (offices), subsidiary and affiliated companies, and active committees.

All amounts must be indicated in thousands of soms (amounts in foreign currency must be indicated in som equivalent at the official rate of the National Bank on the reporting date).

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of March 6, 2025 No. 13/1)

Sections not described in these Methodological Guidelines are filled out in accordance with the relevant normative legal acts of the National Bank.

II.

TITLE PAGE

The title page indicates:

date and outgoing registration number;

date as of which the report was prepared (for example, as of December 31, 2017, means that the report was prepared at the end of the day);

date of completion of the report;

frequency - "monthly", "quarterly", "annual" or "correction". When submitting a monthly report, underline "monthly"; for a quarterly report - underline the word "quarterly". When submitting a report for the 4th quarter, which is annual, underline the word "annual". Mark the word "correction" when submitting a corrected report. Correction of the report is allowed if technical errors arise. In this case, only those reporting forms in which changes were made are submitted, and the changes are marked with a marker;

type of audit or inspection conducted - one or two of the following lines are indicated:

a) internal inspection - if the inspection was conducted by internal audit or auditors;

b) audit without conclusion - if an audit was conducted that gives a conclusion on the correctness of conducting banking operations and accounting;

c) audit with conclusion - if an audit was conducted that, in addition to checking the correctness of conducting banking operations and accounting, gives the MFC recommendations and an action plan for improving and/or perfecting its activities;

name of the reporting MFC, indicated in capital letters;

external audit firm – when submitting an annual report;

certifying signatures of the Chairman of the Board of Directors of the MFC or a member of the Board of Directors replacing the chairman in his absence, the Chairman of the Management Board, the chief accountant, a member of the Management Board overseeing the preparation of the report;

signature of an MFC employee responsible for compiling and submitting the PRR, indicating position, surname, first name, patronymic, and phone number.

total number of clients - indicates the number of clients who received financing, as well as those who placed funds in accounts at the MFC.

III.

INFORMATION ON MEMBERS OF THE BOARD OF DIRECTORS, MANAGEMENT BOARD, SHARIAH COUNCIL AND MAJOR FOUNDERS (SHAREHOLDERS) OF THE MFC

(lapsed in accordance with the Resolution of the Supervisory Committee of the NBKR of March 6, 2025 No. 13/1)

IV.

INFORMATION ON INDIVIDUAL OFFICIALS

(lapsed in accordance with the Resolution of the Supervisory Committee of the NBKR of March 6, 2025 No. 13/1)

V.

BASIC INFORMATION ON MICROFINANCE COMPANIES

(lapsed in accordance with the Resolution of the Supervisory Committee of the NBKR of March 6, 2025 No. 13/1)

VI.

SECTIONS OF THE PERIODIC REGULATORY REPORT

Section 1. "Regulatory Report on Financial Position"

The regulatory report on the financial position reflects the most significant items of the financial position of the MFC from the point of view of regulatory reporting.

The regulatory report on the financial position consists of three columns:

name of the item of the regulatory report on the financial position;

value of the item in soms;

the third column highlights the som equivalent of balance sheet items in foreign currency at the official rate of the National Bank on the reporting date.

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of December 30, 2022 No. 43/2).

All amounts must be indicated in thousands of soms.

Amounts in asset items of the financial position report (except for financing) are shown net of corresponding amounts of provisions for potential losses and losses (hereinafter referred to as PPL), depreciation charges, and discount/premium (net asset value).

The regulatory report on the financial position is compiled without taking into account the amount of offsetting assets and liabilities for financial instruments. At the same time, the amount of offsetting must be disclosed and explained separately in the explanatory note to the PRR.

1. §. Subsection A. "Assets"

In item 1 "Cash", the amount of cash is indicated, including banknotes and coins in the circulating cash register, as well as banknotes and coins converted to soms, including foreign currency in som equivalent at the official rate of the National Bank on the reporting date.

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of December 30, 2022 No. 43/2).

In item 2 "Account at the National Bank",

the amount of funds in the account at the National Bank for calculating mandatory reserve requirements for MFCs attracting funds into client accounts is indicated.

In item 3 "Settlement accounts in other banks and FCOs", the amount of funds in settlement and other accounts in banks or financial organizations is indicated, minus the corresponding PPL. The balance includes the amount in all types of currencies in som equivalent at the National Bank rate on the reporting date.

In item 4 "Deposits in other banks and FCOs", the amounts of funds placed in accounts in banks and financial institutions are indicated, including funds in accounts in pledge, minus the corresponding PPL.

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of March 6, 2025 No. 13/1).

In item 5 "Securities", the book value of Sharia-compliant securities owned by the MFC is indicated: trading securities portfolio, securities available for sale, and securities held to maturity, minus the corresponding special PPL.

In item 6 "Financing provided to banks and FCOs", the balance of financing amounts provided to FCOs on the reporting date is indicated.

In item 7 "Financing provided to other clients", the balance of financing amounts provided to clients, other than FCOs, on the reporting date is indicated.

In item 8 "Special PPL", the amount of special PPL created for classified assets is indicated.

In item 9 "Net Financing", the cost of financing is indicated, minus the special PPL for them (sum of items 6 and 7 minus item 8).

In item 10 "Assets/inventory for subsequent transfer to clients", the cost of buildings, other structures, furniture, equipment, and other assets/inventory acquired by the MFC for subsequent transfer to clients is indicated, including under murabaha and ijara/ijara muntahiya bit-tamlik contracts. These are reflected in a breakdown into real estate and movable property.

In item 11 "Fixed Assets", the cost of land and/or land plots, buildings and other structures owned or used by the MFC, furniture and equipment, including motor vehicles, as well as the cost of materials, labor, and other capitalizable expenses arising in connection with construction or major repair, minus accumulated depreciation on fixed assets, is indicated. Fixed assets must be shown by the following groups: a) land and buildings; b) other fixed assets.

In item 12 "Other Property", real estate and other client property (former pledged property) accepted by the MFC in satisfaction of an asset, minus the corresponding PPL, which are subdivided into real estate and other client property, is indicated.

In item 13 "Investments in unconsolidated companies", the amount of capital investments in companies not consolidated in this report, including in branches and associated companies, minus the corresponding special PPL, is indicated.

In item 14 "Other Assets", the book value of assets not listed above, including cash in transit, minus the corresponding PPL, is indicated.

In item 15 "Total Assets",

the sum of items 1, 2, 3, 4, 5, 9, 10, 11, 12, 13, 14 is indicated.

2. §. Subsection B. "Liabilities"

In item 16 "Term accounts of legal entities", the total amount of term accounts of legal entities at the MFC is indicated, broken down into restricted and unrestricted mudaraba.

In item 17 "Term accounts of individuals", the total amount of term accounts of individuals at the MFC is indicated, broken down into restricted and unrestricted mudaraba.

In item 18 "Financing Received", the amount of financing not considered as short-term placements received by the MFC under the following items is indicated:

a) from banks;

b) from other FCOs of the KR;

c) from international donor organizations (other financial funding sources);

d) from international FCOs;

e) from state authorities.

In item 19 "Funds borrowed by the MFC from legal entities and founders (shareholders)", the amount of borrowings from legal entities and founders (shareholders) – individuals and legal entities is indicated. Information is provided in a breakdown into:

a) "Financing provided to the MFC by founders (shareholders) – individuals" indicates the amount of financing provided by founders (shareholders) – individuals.

b) "Funds borrowed by the MFC from founders (shareholders) – legal entities" indicates the amount of borrowings from founders (shareholders) – legal entities.

c) "From other legal entities" – indicates the amount of borrowings from legal entities that are not founders (shareholders).

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of March 6, 2025 No. 13/1)

In item 20 "Conditional Grants", the amount of balances of received grants is indicated.

In item 21, the amount of balances of received grants in foreign currency in som expression is indicated.

In item 22 "Other Liabilities", liabilities not listed in previous items, including cash in transit, are indicated.

In item 23 "Total Liabilities", the sum of items 16-22 is indicated.

3. §. Subsection C. "Capital"

In item 24 "Share Capital", the value of share capital is indicated in the following items:

a) "ordinary shares" – total amount of ordinary shares of the MFC;

b) "preferred shares" – total amount of preferred shares of the MFC;

c) "capital invested above par" – the amount of funds contributed by shareholders above the par value of shares, representing the difference between the selling price of ordinary and preferred shares and their par value;

d) "additional capital contributed by individuals and legal entities" - funds contributed by individuals and legal entities above the paid-in charter capital or as additional capital, which is accounted for until re-registration in connection with a change in charter capital. These funds are credited only if the MFC has a contract with individuals and legal entities for contributing funds towards the acquisition of their shares/part in the charter capital of the MFC with the following conditions:

• irrevocability (under no circumstances);

• indeterminate term of the contributed funds;

• in the event of bankruptcy of the MFC, claims for these funds will be satisfied in the same queue as shareholders of the MFC.

e) "undistributed profit (losses)" – sum of undistributed profit (profit) of the MFC;

d1) "profit (losses) of previous periods" – profit (losses) of previous years that remained in the MFC after distribution of part of the funds among shareholders and transfer to reserves for future needs of the MFC;

d2) "profit (losses) of the current year" – profit (losses) of the current year;

e) "reserves for future needs" – sum of reserves created for future events at the MFC from the distribution of profit;

In item 25 "General Reserves", the amount of reserves available at the MFC, created from the revaluation of MFC assets, and the difference formed as a result of currency translation during consolidation, as well as the amount of general PPL for financing and other classified assets, is indicated:

a) "reserve for revaluation of fixed assets" - sum of revaluation of fixed assets;

b) "reserve for revaluation of securities" - sum of unrealized income and losses arising from the revaluation of securities;

c) "general PPL for financing" – sum of general PPL for financing;

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of March 6, 2025 No. 13/1)

d) "general PPL for other assets" – sum of general PPL for other assets subject to classification;

e) "other general reserves" - sum of other general reserves;

In item 26 "Profit Smoothing Reserve (PSR)", the amount allocated by the decision of the Board of Directors of the MFC from gross profit before distribution of the mudarib's share, with the aim of maintaining a certain level of yield on investments of investment account holders, is indicated.

In item 27 "Reserve for Coverage of Investment Risks" (if any), the amount allocated from the profit of investment account holders, after distribution of the mudarib's share of profit, with the aim of mitigating risks of future investment losses for investment account holders, is indicated.

In item 28 "Investments of unconsolidated companies", the amount of long-term investments of unconsolidated companies is indicated.

In item 29 "Total Capital", the sum of items 24-28 is indicated.

In item 30 "Total Liabilities and Capital", the sum of items 23 and 29 is indicated.

4. §. Subsection D. "Off-Balance Sheet Obligations"

In item 1 "Obligations to provide financing", obligations to provide financing are indicated.

In item 2 "Guarantees, sureties and similar obligations", guarantees, sureties, and similar obligations issued or confirmed by the MFC are indicated.

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of March 6, 2025 No. 13/1)

In item 3 "Currency Operations", the MFC's obligations for currency operations are indicated.

In item 4 "Obligations to purchase assets", the MFC's obligations to purchase assets in the future are indicated.

In item 5 "Other off-balance sheet obligations", all other off-balance sheet obligations not listed above are indicated.

In item 6 "Total off-balance sheet obligations", the sum of items 1 to 5 is indicated.

5. §. Subsection E. "Breakdown of other assets and liabilities"

In item 1 "Other Assets", a breakdown of MFC assets by the following sub-items is indicated:

a) "income accrued for receipt" indicates the amount of remuneration accrued for receipt on issued financing, securities, accounts in other financial-credit organizations;

b) "paid prepayment" indicates the amount of advance payments made to other parties according to contract terms;

c) "unidentified debtor balances" indicates amounts of funds pending clarification;

d) "other other assets" indicates the amount of other other assets of the MFC not listed above.

In item 2 "Special PPL for other assets", the amount of PPL for the aforementioned other assets of the MFC is indicated.

In item 3 "Net other assets", the net value of other assets (difference between items 1 and 2) is indicated.

In item 4 "Other Liabilities", a breakdown of MFC liabilities by the following sub-items is indicated:

a) "income accrued for payment to clients" indicates the amount of accrued remuneration for payment on funds in client accounts;

b) "deferred income (markup) on murabaha and salam operations" indicates deferred income on murabaha and salam operations.

c) "taxes payable" indicates the amount of taxes payable;

d) "unidentified creditor debt" indicates the amount of creditor debt pending clarification;

e) "other" indicates other liabilities not shown above, including PPL for off-balance sheet obligations.

6. §. Subsection F. "Breakdown of Liabilities"

The subsection reflects detailed information on the liabilities and grants of the MFC.

In column 1 "Name of Operation", the operation according to which funds were attracted is indicated.

In column 2 "Amount of Funds Received", the size of received funds according to the agreement is indicated.

In column 3 "Balance of Received Funds", the balance of liability amounts on the reporting date is indicated.

In columns 4 and 5 "Term for which funds were provided", the minimum and maximum term for which funds were received is indicated.

In column 6 "Creditor", the name of organizations/institutions (it is necessary to indicate each organization in a separate row) that provided funds is indicated.

In column 7 "Markup/Income, in %", the markup/income on operations is indicated. The markup/income must be presented in annual terms in accordance with paragraph 44 of these Methodological Guidelines.

In column 8 "Currency", the currency in which the funds were provided is indicated.

In column 9 "Condition", the conditions for received grants and financing, and the purposes for which grants and financing were received, are indicated. For example, for financing agriculture or construction of a kindergarten, etc.

In column 10 "Yield Coefficient, in %", the yield coefficient in percent is indicated.

The definition of the yield coefficient is comparable to the definition of the annual effective interest rate. The yield coefficient is income in reliable, annual, effective, comparable calculation, in the calculation of which client payments related to obtaining financing or remuneration to the client for placing funds in a deposit account are taken into account.

The yield coefficient is calculated in accordance with the Regulation "On the calculation of the effective interest rate when disseminating information on the amount of remuneration for banking services", approved by the Resolution of the Board of the National Bank of August 27, 2008 No. 33/4.

7. §. Subsection G. "Breakdown of Financing Portfolio"

In column 1 "Product Name", the financing methods used by the MFC are indicated:

group financing without collateral – financing of a group of individuals under subsidiary group liability without collateral;

group financing with collateral - financing of a group of individuals with the condition of having collateral;

individual financing without collateral – financing of individuals and legal entities without collateral (including guarantees);

individual financing with collateral – financing of individuals and legal entities with the condition of having collateral;

other – other financing methods not provided for above.

In columns 2 and 3 "Financing Amount per Client", the minimum and maximum financing amounts per client are indicated;

In columns 4 and 5 "Terms", the minimum and maximum terms in months for which funds were issued are indicated;

In columns 6 and 7 "Markup/Income, in %", the minimum and maximum annual markup/income rates on financing, in percent, are indicated;

In columns 8 and 9 "Yield Coefficient, in %", the minimum and maximum values of the yield coefficient on financing, in percent, are indicated.

In columns 10 and 11 "Accrual Method", the balance of the financing portfolio is indicated, depending on the income accrual method used (on the remaining balance or on the initial balance).

All amounts must be indicated in thousands of soms.

Section 2. "Report on Comprehensive Income"

All items are shown in comparison for the current period and cumulatively from the beginning of the reporting year. Amounts in this report can be positive or negative. Negative amounts must be indicated in parentheses.

All amounts must be indicated in thousands of soms.

1. §. Subsection A. "Income from Operations"

In item 1 "Income from deposits placed in commercial bank accounts", income earned by the MFC on funds placed in accounts in other banks or FCOs is indicated.

In item 2 "Income from securities", income received by the MFC from securities is indicated.

In item 3 "Income from financing provided to FCOs", income received by the MFC from financing provided to FCOs is indicated.

In item 4 "Income from financing provided to other clients, including", income received by the MFC from financing is indicated.

In item 5 "Income from attracted investments", income from attracted investments is indicated.

In item 6 "Other income from financing operations", other income not listed above is indicated.

In item 7 "Total", the sum of items 1 to 6 inclusive is indicated.

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of March 6, 2025 No. 13/1)

2. §. Subsection B. "Expenses Incurred on Operations"

In item 8 "Expenses on term deposits of legal entities", MFC expenses on term deposits of legal entities are indicated.

In item 9 "Expenses on term deposits of individuals", MFC expenses on term deposits of individuals are indicated.

In item 10 "Expenses on financing received from banks", MFC expenses on received financing are indicated.

In item 11 "Expenses on financing received from other financial institutions", expenses on financing received from other financial-credit organizations are indicated.

In item 12 "Expenses on financing received from international financial institutions (other funding sources)", expenses on financing received from international financial institutions are indicated.

In item 13 "Other Expenses", expenses not listed above are indicated.

In item 14 "Total", the sum of items 8 to 13 inclusive is indicated.

In item 15 "Net Income from Operations", the net income received by the MFC (difference between items 7 and 14) during the reporting period is indicated.

In item 16 "PPL", expenses on special and general PPL for financing are indicated.

In item 17 "Net Income after PPL Provisions", the difference between items 15 and 16 is indicated.

(In the edition of the Resolution of the Supervisory Committee of the National Bank of the Kyrgyz Republic of March 6, 2025)