Approval of the Regulation on the Procedure for Commercial Banks to Issue Microcredits for Employing Low-Income Families

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05.04.2022

29.12.2019

23.10.2017

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Resolution of the Cabinet of Ministers of the Republic of Uzbekistan

On the approval of the Regulation on the procedure for commercial banks to issue microcredits for employing low-income families

Based on the Resolution of the President of the Republic of Uzbekistan "On additional measures to support low-income segments of the population" dated September 12, 2017, No. PQ-3268, the Cabinet of Ministers decides to create an effective mechanism for issuing microcredits to low-income families wishing to engage in specific types of labor:

1. The Regulation on the procedure for commercial banks to issue microcredits for employing low-income families is approved according to the Appendix.

2. It is accepted for information that the Central Bank of the Republic of Uzbekistan shall designate commercial banks that issue microcredits to low-income families wishing to engage in specific types of labor on preferential terms that allow them to adequately provide for their families.

After designating commercial banks that issue microcredits to low-income families wishing to engage in specific types of labor on preferential terms, it is recommended that the Central Bank of the Republic of Uzbekistan widely publicize their list in the mass media.

3. Control over the execution of this Resolution is assigned to the Deputy Prime Minister of the Republic of Uzbekistan, J.A. Kuchkarov.

Prime Minister of the Republic of Uzbekistan A. ARIPov

Tashkent city,

October 20, 2017,

No. 857

APPENDIX

to the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated October 20, 2017, No. 857

REGULATION

On the procedure for commercial banks to issue microcredits for employing low-income families

Chapter 1. General Provisions

1. This Regulation establishes the procedure for issuing microcredits to low-income families wishing to engage in specific types of labor on preferential terms that allow them to adequately provide for their families.

2. The following main concepts are used in this Regulation:

borrower
— an adult member of a low-income family wishing to engage in specific types of labor, included in a list formed by a working group consisting of responsible employees of the Federation of Trade Unions of Uzbekistan, the "Mahalla" Charitable Public Foundation, the Council of Ministers of the Karakalpakstan Republic, regional and Tashkent city Khokimiyats, as well as commercial banks;

bank
— a commercial bank designated by the Central Bank of the Republic of Uzbekistan that issues microcredits to borrowers.

Chapter 2. Terms of Issuance of Microcredits

3. Microcredits are issued on the basis of the scheme attached to this Regulation, on the conditions of repayability, payment, security, term, and targeted use.

4. Microcredits are issued to borrowers for:

purchase of sewing machines, fabrics and other consumables, tools for artisan activities, household, computer and other equipment, as well as other equipment ensuring employment;

development of personal plot plots (construction of small greenhouses, purchase of livestock and poultry, construction of barns and chicken coops, purchase of gardening tools and equipment). See previous edition.

5. Microcredits are issued by banks to borrowers at an annual rate of 4 percent up to an amount of 100 times the base calculation amount.

(P. 5 amended by the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated December 28, 2019, No. 1046 — National Database of Legislative Acts of the Republic of Uzbekistan, 29.12.2019, No. 09/19/1046/4242)

6. Microcredits are issued to borrowers for a term of no more than 3 years with a grace period of up to 6 months without the right to extend the repayment period, based on the official decision of the bank's credit committee.

Chapter 3. Procedure for Formalizing Microcredits

7. To obtain a microcredit, the borrower submits the following documents to the bank:

an application requesting a microcredit for the purposes specified in paragraph 4 of this Regulation;

a certificate issued by self-governing bodies indicating the existence of a plot in the borrower's possession, in case a microcredit is requested for the purpose of developing personal plot plots;

document on the security of the repayment of the microcredit.

8. As security for the repayment of microcredits, the bank is submitted one of the following types of collateral:

property pledge;

guarantee of a commercial bank or insurance company;

guarantee of a third party;

insurance of the risk of non-repayment of the microcredit obtained by the borrower in favor of the bank.

9. When submitting the relevant documents specified in paragraph 7 of this Regulation, the borrower presents his identity document and provides a copy of it.

10. An application submitted with all the necessary documents specified in paragraph 7 of this Regulation attached is considered by the bank from the date of its receipt. The bank's credit committee must make a decision on this application within a period not exceeding 3 working days.

11. If the issuance of a microcredit is justifiedly rejected, the bank must inform the applicant in writing without delay from the next working day.

Chapter 4. Procedure for Issuance and Repayment of Microcredits

12. Microcredits are implemented by transferring funds from the borrower's loan account to the deposit account of the relevant organizations at the bank, upon the borrower's payment order, until the funds are claimed for the purposes specified in the credit contract.

13. Accounting for microcredits issued to borrowers is maintained on separately designated balance sheet accounts.

14. The borrower may repay the microcredit and the interest accrued on it in cash, through bank plastic cards, or by transferring funds from the borrower's deposit account.

15. During the period of use of the microcredit, the bank conducts constant monitoring by going directly to the site with the participation of a citizens' assembly employee to determine the targeted use of the microcredit.

16. If it is found that the obtained microcredit was used for other purposes, the bank has the right to recover the unused part of the microcredit from the borrower in advance in the manner specified in the credit contract.

17. In collecting debt on microcredits, interest for the use of the microcredit is collected first.
    See previous edition.

18. If the microcredit is not repaid within the established terms, the bank initiates recovery against the type of collateral submitted as security for the repayment of the microcredit in the manner established by legislative acts.

(P. 18 amended by the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated April 4, 2022, No. 153 — , 05.04.2022, No. 09/22/153/0266)

Chapter 5. Final Provisions
See previous edition.

19. Persons guilty of violating the requirements of this Regulation are held responsible in the manner established by legislative acts.

(P. 19 amended by the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated April 4, 2022, No. 153 — , 05.04.2022, No. 09/22/153/0266)

APPENDIX

to the Regulation on the procedure for commercial banks to issue microcredits for employing low-income families

SCHEME

for the issuance of microcredits by commercial banks for employing low-income families

(National Database of Legislative Acts, 23.10.2017, No. 09/17/857/0155; 29.12.2019, No. 09/19/1046/4242; , 05.04.2022, No. 09/22/153/0266)