Rules for Regulating the Activities of Microfinance Organizations Conducting Operations Based on Islamic Principles of Banking and Finance

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Date of creation: 2026-03-24

Attention!

Changes introduced by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 29, 2025, No. 2025-P-12/71-3-(NPA), enter into force on April 1, 2026.

Appendix
to the Resolution of the Board of the National Bank of the Kyrgyz Republic of May 30, 2014, No. 24/11

RULES

regulating the activities of microfinance organizations conducting operations based on Islamic principles of banking and finance

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6, June 15, 2016, No. 25/2, June 15, 2017, No. 2017-P-12/25-12, January 31, 2018, No. 2018-P-12/4-6, October 5, 2022, No. 2022-P-33/61-3, December 21, 2022, No. 2022-P-12/81-7, December 20, 2023, No. 2023-P-12/80-3, December 11, 2024, No. 2024-P-12/66-1-(NPA), September 12, 2025, No. 2025-P-12/46-1-(NPA), October 23, 2025, No. 2025-P-12/55-3-(NPA), October 23, 2025, No. 2025-P-12/55-4-(NPA), December 29, 2025, No. 2025-P-12/71-3-(NPA))

Chapter 1. General Provisions

1. These Rules regulate the activities of licensed and regulated by the National Bank of the Kyrgyz Republic microfinance organizations conducting operations based on Islamic principles of banking and finance (hereinafter - Rules), including microfinance organizations having an "Islamic window" (hereinafter - MFO).

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA))

2. The purpose of these Rules is to establish, in accordance with the Constitutional Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", the Laws of the Kyrgyz Republic "On Banks and Banking Activity" and "On Microfinance Organizations in the Kyrgyz Republic", economic standards and requirements mandatory for compliance by MFOs.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 21, 2022, No. 2022-P-12/81-7)

3. MFOs may establish higher requirements for economic standards according to their internal risk management policy, without violating the values established for MFOs in the regulatory legal acts of the National Bank of the Kyrgyz Republic.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA))

4. (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6)

5. Permitted types of transactions (contracts) of MFOs for the placement and attraction of funds (if indicated in the license) in accordance with Islamic principles of banking and finance are carried out in accordance with standard contracts approved by the Shariah Council and the requirements of the regulatory legal acts of the National Bank.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6)

6. MFOs document the provision of financing to clients/suppliers/partners (hereinafter - client) through a financing contract in accordance with the requirements of legislation, including under subsidiary or joint liability of a group of persons.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6, December 11, 2024, No. 2024-P-12/66-1-(NPA))

7. MFOs must carry out accounting of their operations and prepare financial reporting in accordance with the requirements of the National Bank.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018, No. 2018-P-12/4-6)

8. MFOs conduct internal audit to verify the accuracy of accounts, assess the adequacy and effectiveness of their internal control system, and ensure compliance with the regulatory legal acts of the Kyrgyz Republic, as well as Shariah standards. For this purpose, the microfinance company (hereinafter - MFC) is obliged, and the microcredit company (hereinafter - MCC) and microcredit agency (hereinafter - MCA) may create their own internal audit service.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6, September 12, 2025, No. 2025-P-12/46-1-(NPA))

8-1. Systemically important MFOs are considered those that have systemic significance for the microfinance sector. Criteria for systemic significance are determined by the regulatory legal acts of the National Bank. A special regulatory and supervisory regime established by the National Bank may be applied to systemically important MFOs.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6, January 31, 2018, No. 2018-P-12/4-6)

8-2. For the purposes of these Rules, wholesale financing is understood as assets carrying credit risk, provided by FCOs for subsequent provision of financing to clients in compliance with principles and conditions corresponding to Shariah standards, for the purpose of promoting financial services and supporting entrepreneurial activity.

An MFO engaged in wholesale financing is understood as an MFO in which the share of wholesale financing constitutes more than 70 (seventy) percent of its financing portfolio.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6, June 15, 2017, No. 2017-P-12/25-12, January 31, 2018, No. 2018-P-12/4-6, December 11, 2024, No. 2024-P-12/66-1-(NPA))

8-3. MFOs must conduct document management in the state language and, if necessary, in the official language. All internal documents, including contracts, agreements with counterparties, should be drawn up in the state language and, if necessary, in the official language, by mutual agreement of the parties. This consent is attached/stored in the client/partner dossier. At the same time, it is permitted to draw up contracts with counterparties in the state and/or official and in foreign languages, having equal legal force. Drawing up contracts in a foreign language is permitted only in the presence of a certified translation into the state or official language in the established manner.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 20, 2023, No. 2023-P-12/80-3)

Chapter 2. Regulation of the activities of microfinance companies not accepting deposits

9. MFC must have an internal financing policy approved by the Board of Directors, defining:

• the main region of activity;
• the direction of financing;
• products provided to clients;
• the maximum total amount of financing provided to the same client or a group of related persons, in an amount not exceeding 3 (three) percent of the minimum size of the authorized capital for a newly created MFC (not attracting term deposits from individuals and legal entities). This restriction does not apply to financing issued within the framework of the implementation of other property of the MFC, transformed from a commercial bank;
• (paragraph 6 lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6)
• for MFCs engaged in wholesale financing, the maximum total amount of financing issued to the same client or a group of related persons must not exceed 20 percent of the size of the equity capital.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6, October 5, 2022, No. 2022-P-33/61-3, December 11, 2024, No. 2024-P-12/66-1-(NPA), December 29, 2025, No. 2025-P-12/71-3-(NPA))

10. (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 5, 2022, No. 2022-P-33/61-3)

10-1. MFCs whose authorized capital exceeds the size of the authorized capital established for newly created MFCs, as well as the indicator of the ratio of equity capital to the sum of authorized capital is equal to at least 150 percent, have the right to issue financing to the same client or a group of related persons, in a maximum total amount of financing not exceeding two percent of the size of the current registered authorized capital of the MFC, with the exception of financing under the Ijara Muntahia Bitamalik operation.

When issuing MFC financing in the amount specified in the first paragraph of this clause, the following conditions must be met:

1. the value of the markup/income on financing, with the exception of the value of profit from Mudaraba and Shareka/Musharaka operations, must not exceed the maximum allowable percentage, calculated based on the discount rate of the National Bank of the Kyrgyz Republic plus 20 percent;

2. the total volume of financing in the amount specified in the first paragraph of this clause must not exceed 50 percent of the MFC's financing portfolio;

3. there are necessary documentary confirmations of the client's solvency (rights to assets generating the client's income, certificate of salary from the client's workplace, patent, certificate, etc.), and an assessment of the client's solvency has been conducted, confirmed by the conclusion of a responsible financing specialist or another employee of the MFC in accordance with the financing policy and/or other internal documents of the MFC;

4. a Client Application Form for obtaining financing is provided, and in the Application Form for obtaining financing, the purposes of using the provided financing must be indicated with corresponding calculations and forecasts;

5. the client's debt coverage ratio is equal to the ratio of the client's total income to the monthly payment on the asset carrying credit risk (on the principal amount and markup), must be at least 130 percent.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 5, 2022, No. 2022-P-33/61-3)

11. MFC must comply with the corresponding requirements for the minimum size of authorized capital and the conditions for its formation, established by the Resolution of the Board of the National Bank "On the minimum size of the authorized capital of non-bank financial and credit organizations".

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated October 5, 2022, No. 2022-P-33/61-3)

12. The calculation of the equity capital of the MFC (as of the assessment date) is carried out based on the following indicators:

– ordinary shares;
– preferred shares;
– capital contributed above par;
– additional capital contributed by individuals and legal entities; – reserves for future needs; – perpetual subordinated debt;

Perpetual subordinated debt is understood as an unsecured obligation that has no maturity dates, must not be redeemed early at the request of creditors, and claims for which, in the event of liquidation of the MFC, are satisfied last after satisfying all claims from creditors, but before settlements with MFC shareholders. The MFC must at all times have the full right to cancel the payment of yield on subordinated debt. Perpetual subordinated debt may be redeemed at the initiative of the MFC only after a minimum period of not less than five years, after obtaining prior permission from the National Bank, as well as if redemption will not lead to a violation of standards.

– undistributed profit/losses of previous years; – losses of the current year; – minus investments in the capital (shares, equity participation) of other MFOs, leasing companies, and banks.

At the same time, investments in capital (shares, equity participation) are understood as the balance of actually invested funds in the capital of MFOs, leasing companies, and banks.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 29, 2025, No. 2025-P-12/71-3-(NPA))

12-1. The value of the minimum equity capital standard must be maintained at a level of not less than 100 (one hundred) percent of the minimum size of the authorized capital.

The standard of the minimum size of equity capital is determined by the formula:

EC / AC * 100%, where:

EC - equity capital of the MFC as of the assessment date (in accordance with clause 12 of these Rules);

AC - minimum authorized capital for newly created and existing MFCs not accepting deposits, established by the Resolution of the Board of the National Bank "On the minimum size of the authorized capital of non-bank financial and credit organizations" dated 05.10.2022 No. 2022-P-33/61-2-(NF KU).

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA), December 29, 2025, No. 2025-P-12/71-3-(NPA))

13. MFCs have the right to invest in the capital of MFOs, leasing companies, and banks, the activities of which do not contradict Shariah standards.

The maximum total size of MFC investments (investments in capital (shares, equity participation), debt obligations, financial investments under the Ijara Muntahia Bitamalik contract and any other similar financial investments) in MFOs, leasing companies, and banks must not exceed 30 percent of the size of the MFC's equity capital and is determined by the formula:

TI / EC * 100% ≤ 30%, where:

TI - total size of MFC investments as of the assessment date;

EC - equity capital of the MFC as of the assessment date (clause 12 of these Rules).

When calculating this standard, financing provided to MFOs, leasing companies, and banks, in the capital (shares, equity participation) of which MFC investments are placed, is taken into account.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6, December 11, 2024, No. 2024-P-12/66-1-(NPA), December 29, 2025, No. 2025-P-12/71-3-(NPA))

13-1. (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018, No. 2018-P-12/4-6)

13-2. (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018, No. 2018-P-12/4-6)

13-3. (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018, No. 2018-P-12/4-6)

13-4. The maximum size of investments in property (fixed assets) must not exceed 80 (eighty) percent of the size of the MFC's equity capital.

Property is understood as property (including under construction/installation real estate, vehicles, etc.) that belongs to the MFC or is at the disposal of the MFC under a lease agreement and/or is used/will be used as a fixed asset.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA))

14. Microfinance companies do not have the right:

1. to provide financing for the acquisition of securities issued by the microfinance company itself, as well as to accept them as collateral;

2. to issue guarantees;

3. to issue guarantees in an amount that, in aggregate with the provided financing, exceeds the standard of the maximum size of financing for one client;

4. to carry out other banking operations and transactions, except for operations and transactions provided for by the Law "On Microfinance Organizations in the Kyrgyz Republic";

5. to carry out professional activity in the securities market;

6. to issue letters of credit, carry out operations with precious metals, and trust management of property.

14-1. MFCs have the right to issue shares and debt securities (bonds and promissory notes), with the exception of international bonds, within the limits established by the National Bank and in accordance with the legislation of the Kyrgyz Republic.

This restriction, as well as its value, may be established individually for a specific MFC by decision of the Supervisory Committee of the National Bank.

The issuance of bonds for the redemption of financing and loans is not allowed, as well as in the presence of overdue debt on financing and loans during the last year before the decision to issue bonds is made.

Payment of shares and other securities of the MFC with promissory notes, as well as with funds, securities, other things or property rights, or other rights having a monetary value, belonging to individuals and legal entities included in the sanction lists of individuals and legal entities, groups, and organizations, regarding which there is information about their participation in terrorist or extremist activities and the spread of weapons of mass destruction (Consolidated Sanctions List of the Kyrgyz Republic and Consolidated Sanctions List of the UN Security Council) is prohibited.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated October 23, 2025, No. 2025-P-12/55-4-(NPA), December 29, 2025, No. 2025-P-12/71-3-(NPA))

14-2. Microfinance companies not accepting deposits are obliged to comply with economic standards and restrictions established by the National Bank, including:

• minimum size of paid-up authorized capital;
• standard of minimum equity capital;
• maximum total size of financing;
• maximum total size of investments in microfinance organizations, leasing companies, and banks;
• maximum total size of funds borrowed from founders (shareholders) - individuals;
• maximum total size of funds borrowed from founders (shareholders) - legal entities;
• maximum size of investments in property (fixed assets);
• maximum size of the issuance of debt securities.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 29, 2025, No. 2025-P-12/71-3-(NPA))

15. MFCs not accepting deposits have the right to borrow funds from legal and individual founders (shareholders) of the MFC and legal entities.

The markup/yield rate on funds borrowed from founders (shareholders) must not exceed the discount rate of the National Bank by more than 5 (five) percentage points.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA))

15-1. (Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018, No. 2018-P-12/4-6)

15-2. Forms of financial reporting and information on investments, borrowings from founders, must be signed by the Chairman of the Board of the MFC or another person officially having the right of first signature, as well as by the person responsible for the preparation and submission of information.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA))

Chapter 3. Requirements for the activities of microfinance companies applying for a license to attract funds

(Lost force in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016, No. 4/6)

Chapter 4. Regulation of the activities of microfinance companies accepting deposits

22. MFCs conducting deposit-taking operations are obliged to comply with the economic standards and restrictions established by the National Bank, including:

• minimum size of paid-up authorized capital;
• minimum size of equity capital (M1);
• adequacy (sufficiency) standard of equity capital (M2);
• maximum risk size for one client (M3);
• adequacy (sufficiency) of total capital;
• liquidity standard (M4);
• standard of restriction on risk of return of deposits (M5);
• maximum risk size for operations with affiliated and related persons;
• maximum total debt of one MFC employee for financing provided by the company;
• maximum total size of investments in MFOs, leasing companies, and banks;
• size of investments in non-state debt securities;
• maximum total size of funds borrowed from founders (shareholders) - individuals;
• maximum total size of funds borrowed from founders (shareholders) - legal entities;
• maximum size of investments in property (fixed assets);
• maximum size of the issuance of debt securities.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 29, 2025, No. 2025-P-12/71-3-(NPA))

22-1. Microfinance companies have the right to attract only term deposits from individuals and legal entities for a period of not less than 30 days.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA))

23. MFCs conducting deposit-taking operations do not have the right:

1. to provide financing for the acquisition of securities issued by the MFC itself, as well as to accept them as collateral;

2. to issue guarantees;

3. to issue guarantees in an amount that, in aggregate with the provided financing, exceeds the standard of the maximum size of financing for one client;

4. to carry out other banking operations and transactions, except for operations and transactions provided for by the Law "On Microfinance Organizations in the Kyrgyz Republic";

5. to carry out professional activity in the securities market;

6. to issue letters of credit, carry out operations with precious metals, and trust management of property.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA))

23-1. MFCs have the right to issue shares and debt securities (bonds and promissory notes), with the exception of international bonds, within the limits established by the National Bank and in accordance with the legislation of the Kyrgyz Republic.

This restriction, as well as its value, may be established individually for a specific MFC by decision of the Supervisory Committee of the National Bank.

The issuance of bonds for the redemption of financing and loans is not allowed, as well as in the presence of overdue debt on financing and loans during the last year before the decision to issue bonds is made.

Payment of shares and other securities of the MFC with promissory notes, as well as with funds, securities, other things or property rights, or other rights having a monetary value, belonging to individuals and legal entities included in the sanction lists of individuals and legal entities, groups, and organizations, regarding which there is information about their participation in terrorist or extremist activities and the spread of weapons of mass destruction (Consolidated Sanctions List of the Kyrgyz Republic and Consolidated Sanctions List of the UN Security Council) is prohibited.

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated October 23, 2025, No. 2025-P-12/55-4-(NPA), December 29, 2025, No. 2025-P-12/71-3-(NPA))

Chapter 5. Economic standards and order of their calculation for microfinance companies conducting deposit-taking operations

24. Requirements for the authorized capital of microfinance companies conducting operations on attracting term deposits are established by the Resolution of the Board of the National Bank "On the minimum size of the authorized capital of non-bank financial and credit organizations" dated 05.10.2022 No. 2022-P-33/61-2-(NF KU).

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA))

25. The value of the minimum equity capital standard (M1) must be maintained at a level of not less than 100 (one hundred) percent of the minimum size of the authorized capital.

The standard of the minimum size of equity capital of the MFC (M1) is determined by the formula:

M1 = EC / AC * 100%, where:

EC - equity capital of the MFC as of the assessment date (clause 12 of these Rules);

AC - minimum authorized capital for newly created and existing MFCs accepting deposits, established by the Resolution of the Board of the National Bank "On the minimum size of the authorized capital of non-bank financial and credit organizations" dated 05.10.2022 No. 2022-P-33/61-2-(NF KU).

(In the edition of the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated December 11, 2024, No. 2024-P-12/66-1-(NPA), December 29, 2025, No. 2025-P-12/71-3-(NPA))

26. The value of the adequacy (sufficiency) standard of equity capital (M2) must be maintained at a level of not less than 8 percent.

The adequacy (sufficiency) standard of equity capital of the MFC is determined by the formula:

M2 = EC / TA * 100%, where:

EC – equity capital of the MFC as of the assessment date (in accordance with clause 12 of these Rules);

TA – sum of balance sheet assets as of the assessment date minus the sum of deposits placed in commercial banks as collateral in the amount of attracted funds in national currency for the purpose of hedging currency risks, as well as intangible assets related to technical and software products aimed at increasing the number of clients and service coverage.

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 29, 2025, No. 2025-P-12/71-3-(NPA))

26-1. The total capital of the MFC (as of the assessment date