Resolution of the Board of the National Bank of the Kyrgyz Republic No. 35/17 of September 25, 2013 on Amendments to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic Regulating the Activities of Microfinance Organizations

NATIONAL BANK OF THE KYRGYZ REPUBLIC

RESOLUTION

of September 25, 2013 No. 35/17

On Amendments to Certain Regulatory Legal Acts of the National Bank of the Kyrgyz Republic Regulating the Activities of Microfinance Organizations

(In the edition of the Resolution of the Board of the National Bank of the Kyrgyz Republic of December 9, 2015 No. 76/9)

In accordance with Articles 7 and 43 of the Law of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic", the Board of the National Bank of the Kyrgyz Republic

RESOLVES:

1. Approve the amendments to certain regulatory legal acts of the National Bank of the Kyrgyz Republic (attached).

2. To the Legal Department:

• publish this resolution on the official website of the National Bank of the Kyrgyz Republic;

• after official publication, send this resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State Register of Regulatory Legal Acts of the Kyrgyz Republic.

3. This resolution enters into force upon the expiration of fifteen days from the date of official publication.

4. The Department of Supervision and Licensing Methodology shall bring this resolution to the attention of microfinance organizations.

5. Control over the implementation of this resolution shall be entrusted to the Deputy Chairman of the National Bank of the Kyrgyz Republic Z.L. Chokoev.

Chairman		Z. Asankozhoeva

		Appendix 1 to the resolution of the Board of the National Bank of the Kyrgyz Republic of September 25, 2013 No. 35/17

1. (Lost force in accordance with the resolution of the Board of the National Bank of the Kyrgyz Republic of December 9, 2015 No. 76/9)

2. Make the following amendments to the Temporary Rules for regulating the activities of microfinance companies in the territory of the Kyrgyz Republic, approved by the resolution of the Board of the National Bank of the Kyrgyz Republic of February 19, 2003 No. 4/2:

1) In paragraph 2.1, after the words "(not attracting term deposits from individuals and legal entities)", add the words ", except for cases provided for in paragraph 2.1.-1 of these Temporary Rules".

2) Supplement Section 2 with paragraph 2.1.-1 of the following content:

"2.1.-1. Issuance of a microloan exceeding the maximum size of a microloan issued by a microfinance company to the same borrower, established by paragraph 2.1 of these Temporary Rules, except for microfinance organizations accepting term deposits from individuals and legal entities and engaged in wholesale lending, is permitted for the purpose of expanding/developing the existing business, including the creation of additional jobs, in accordance with Article 2 of the Law of the Kyrgyz Republic "On Microfinance Organizations in the Kyrgyz Republic", under the following lending directions:

• trade;

• agriculture (including crop production, animal husbandry, harvesting/processing of agricultural products);

• services;

• transport;

• industry;

• construction;

• and other directions not contradicting the goals and objectives of microfinance, in accordance with the requirements of the Law of the Kyrgyz Republic "On Microfinance Organizations in the Kyrgyz Republic".

When issuing microloans specified in the first paragraph of this clause by microfinance companies, the following conditions must be met:

1) the microfinance company has a developed policy in accordance with the goals and objectives of microfinance, defining specific credit products;

2) the amount of such a microloan, subject to the established conditions (no more than 10% of the authorized capital), must not exceed 3,000,000 (three million) som (or equivalent in foreign currency);

3) there is relevant information from the Credit Information Bureau (CIB) regarding the credit history of the applicant, including regarding overdue loans previously obtained by the applicant, as well as information on whether the applicant acts as a guarantor for any other loans;

4) there are necessary documentary confirmations of the applicant's solvency (rights to assets generating the applicant's income, salary certificate from the place of work, patent, certificate, etc.), and an assessment of the applicant's solvency has been conducted, confirmed by the conclusion of a responsible credit specialist or employee in accordance with the credit policy and/or other internal documents of the microcredit company;

5) the applicant's Business Plan is provided, in which the goals of using the loan with corresponding calculations and forecasts must be indicated;

6) there are internal regulatory documents of the microfinance company providing for the procedure for subsequent monitoring of the targeted use of the issued microloan;

7) the borrower's debt coverage ratio is equal to the ratio of the borrower's total income to the monthly loan payment (on the principal amount and interest) of not less than 130 percent.".