Instruction No. 198 on the Procedure for Regulating Microcredit Funds

1 "Registered" "Approved" by the Ministry of Justice by Resolution of the Board of the Republic of Tajikistan National Bank of Tajikistan No. 138 "b" dated November 9, 2012 No. 195 dated August 30, 2012 Supplement "Registered" Supplement "Approved" by the Ministry of Justice by Resolution of the Board of the Republic of Tajikistan National Bank of Tajikistan No. 138 "g" dated September 14, 2017 No. 106 dated August 21, 2017 INSTRUCTION NO. 198 ON THE PROCEDURE FOR REGULATING THE ACTIVITIES OF MICROCREDIT FUNDS

The Instruction "On the Procedure for Regulating the Activities of Microcredit Funds" (hereinafter - the Instruction) is developed in accordance with Article 23 of the Law of the Republic of Tajikistan "On Microfinance Organizations" and establishes the procedure for regulating the activities of microcredit funds.

1. GENERAL PROVISIONS
2. The following main terms are used in this Instruction:

• loan - funds provided by a microcredit fund to a borrower (individuals and legal entities) for a specified term, subject to interest payment and repayment;
• microloan - a loan provided by a microcredit fund to a borrower for a specified term on the conditions of interest payment and repayment, the maximum amount of which for individuals does not exceed 250,000 (two hundred fifty thousand) somoni, and for legal entities 350,000 (three hundred fifty thousand) somoni;
• loan interest rate - the total amount expressed as a percentage of the loan principal, which the borrower pays for its use calculated over a specified period (month, quarter, year).

1.1. Microcredit funds created solely for the purpose of issuing loans to other credit organizations may issue loans in an amount not exceeding 10% of their own balance sheet capital.

2 2. LICENSING OF THE ACTIVITIES OF MICROCREDIT FUNDS 2. The procedure for issuing, revoking, and annulling the license of a microcredit fund is carried out in accordance with the Law of the Republic of Tajikistan "On Microfinance Organizations". 3. A microcredit fund operating based on a previously obtained certificate has the right to apply to the National Bank of Tajikistan for replacement of the certificate with a license. 4. In case of loss of the license by a microcredit fund, a copy (duplicate) of the license is issued to it. 5. A microcredit fund is obliged to notify the National Bank of Tajikistan within 3 days about the loss of the license and publish an announcement in one of the official publications regarding the invalidity of the lost license. 6. To obtain a copy (duplicate) of the license, a microcredit fund submits to the National Bank of Tajikistan an application with a copy of the announcement in the official publication. 7. A copy (duplicate) of the license is issued to a microcredit fund within 30 days after receipt of the application based on an order of the Chairman of the National Bank of Tajikistan.

3 3. PROVISION OF MICROLOANS 8. The procedure for providing microloans to clients of a microcredit fund is established by the regulatory legal acts of the National Bank of Tajikistan. 9. The loan interest rate is established in the contract with the client.

4. ACCOUNTING RULES, INSPECTION AND AUDIT
5. A microcredit fund maintains accounting records and prepares financial reporting in the manner established by the National Bank of Tajikistan.
6. The list, form, and deadlines for submitting accounting and other reports of a microcredit fund, as well as liability for their violation, are established by the regulatory legal acts of the National Bank of Tajikistan.
7. The National Bank of Tajikistan conducts inspections of a microcredit fund's activities at its location and outside its location.
8. The activities of a microcredit fund are subject to annual external audit.

5 5. REORGANIZATION AND LIQUIDATION OF A MICROCREDIT FUND 14. Reorganization of a microcredit fund is carried out in the form of merger and accession with other microcredit funds after obtaining the consent of the National Bank of Tajikistan in accordance with the legislation of the Republic of Tajikistan. 15. A microcredit fund seeking reorganization applies to the National Bank of Tajikistan with an application and provides the following documents:

• a resolution of the supervisory council of the microcredit fund on reorganization;
• information on executive officers indicating surname, first name, patronymic, citizenship, permanent place of residence, specialty, education, and work experience;
• a certificate from the authorized body regarding the fulfillment of obligations to the state budget for the last year of operations.

16. The National Bank of Tajikistan considers the application of a microcredit fund for reorganization within 1 month and makes a corresponding decision.
17. A decision on granting consent for the reorganization of a microcredit fund is made by the Board of the National Bank of Tajikistan.
18. Consent for the reorganization of a microcredit fund is not granted in the following cases:

• if the microcredit fund has signs of bankruptcy;
• if a decision on liquidation has been made regarding the microcredit fund;
• if reorganization leads to the emergence of risks;

19. Liquidation of a microcredit fund is carried out in accordance with the Law of the Republic of Tajikistan "On Liquidation of Credit Organizations".