Rules for the Regulation of Guarantee Funds' Activities

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Creation date: 2026-04-07

Appendix
to the Resolution of the Board of the National Bank of the Kyrgyz Republic of February 28, 2024

No. 2024-P-12/8-3-(NPA)

RULES

regulation of guarantee funds' activities

(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic of June 18, 2025 No. 2025-P-12/28-1-(NPA), June 27, 2025 No. 2025-P-12/31-1-(NPA), October 23, 2025 No. 2025-P-12/55-3-(NPA), December 19, 2025 No. 2025-P-12/68-2-(NPA), December 29, 2025 No. 2025-P-12/71-3-(NPA))

Chapter 1. General Provisions

1. These Rules for the Regulation of Guarantee Funds' Activities (hereinafter - the Rules) define the following requirements for the activities of guarantee funds:

• general requirements;

• economic norms, requirements and restrictions;

• on the issuance of guarantees and guarantee instruments and the fulfillment of obligations under them;

• on accounting and control;

• on the organization and functioning of the internal control system and risk management;

• on the conduct of external audit;

• on the provision of periodic regulatory reporting.

2. Guarantee funds carry out their activities by providing guarantees for clients' obligations under financing agreements, as well as within the framework of agreements with financial-credit organizations/international financial organizations. In this context, financing is understood as the provision of a loan, financing in accordance with Islamic principles, or their substitutes in the form of a bank guarantee, leasing, trade financing, or factoring financing by a financial-credit organization/international financial organization.

(As amended by the Resolution of the Board of the NB KR of June 27, 2025 No. 2025-P-12/31-1-(NPA))

3. The following concepts and terms are used in these Rules:

1) Client - a legal entity or an individual engaged in individual labor or entrepreneurial activity, who has received commercial financing, budget lending in a financial-credit organization/international financial organization, or an individual - a citizen of the Kyrgyz Republic, who has received mortgage financing or financing under a state program/project, part of which is secured by a guarantee.

2) Guarantee - the obligation of the guarantee fund to a financial-credit organization/international financial organization to be responsible for the fulfillment of part of the client's obligations on the principal debt under financing agreements within the amount of the guarantee provided.

3) Guarantee activity - activity aimed at increasing the availability of financing for clients and directed at reducing part of the credit risks of financial-credit organizations/international financial organizations by providing guarantees.

4) Guarantee provision policy - a document approved by the authorized body of the guarantee fund; regulating the procedure and conditions for providing guarantees, types of guarantee instruments, principles of providing guarantees, criteria and requirements for selecting clients' obligations, as well as the conditions for guarantee amortization and the liability of the parties; corresponding to the requirements of regulatory legal acts of the National Bank.

5) Guarantee instruments - a set of various forms and types of guarantees used to secure clients' obligations under financing agreements.

6) Recourse claim - the right of the guarantee fund to demand reimbursement from the client of the amount paid to the financial-credit organization/international financial organization in fulfillment of the obligation under the guarantee agreement.

7) Women's entrepreneurship - entrepreneurial activity in accordance with the legislation of the Kyrgyz Republic.

7) Financial-credit organizations - banks, non-bank financial-credit organizations that, on the basis of licenses (certificates) issued by the National Bank of the Kyrgyz Republic, have the right to carry out banking operations, as well as JSC "State Development Bank of the Kyrgyz Republic" and the authorized body for implementing state policy in the field of budget lending, having concluded a cooperation agreement with the guarantee fund.

8) International financial organizations - organizations created on the basis of interstate (international) agreements, carrying out financing in the Kyrgyz Republic and having concluded a cooperation agreement with the guarantee fund (hereinafter - IFOs).

(As amended by the Resolutions of the Board of the NB KR of June 18, 2025 No. 2025-P-12/28-1-(NPA), June 27, 2025 No. 2025-P-12/31-1-(NPA))

Chapter 2. General Requirements for the Activities of a Guarantee Fund

4. The National Bank of the Kyrgyz Republic (hereinafter - the National Bank) has the right to establish economic norms, requirements and restrictions mandatory for compliance by guarantee funds, to check the activities of guarantee funds, and to apply measures of influence provided for by the Law of the Kyrgyz Republic "On Guarantee Funds in the Kyrgyz Republic" and regulatory legal acts of the National Bank.

5. The provision of guarantees is carried out by concluding a guarantee agreement between the guarantee fund, the financial-credit organization/IFO and the client, taking into account the requirements of the regulatory legal acts of the National Bank.

Portfolio guarantees are guarantees provided within the framework of relevant cooperation agreements with financial-credit organizations/IFOs.

Guarantee instruments are provided in accordance with the Law of the Kyrgyz Republic "On Guarantee Funds in the Kyrgyz Republic", regulatory legal acts of the National Bank and the guarantee provision policy of the guarantee fund.

(As amended by the Resolution of the Board of the NB KR of June 27, 2025 No. 2025-P-12/31-1-(NPA))

6. The procedure for providing guarantee instruments and the types of guarantee instruments are independently established in the internal documents of the guarantee fund, taking into account the requirements provided for by the regulatory legal acts of the National Bank.

7. Guarantee instruments are provided for part of the client's obligation to the financial-credit organization/IFO in accordance with the guarantee provision policy.

(As amended by the Resolution of the Board of the NB KR of June 27, 2025 No. 2025-P-12/31-1-(NPA))

8. The guarantee fund does not ensure the fulfillment of the client's obligations under the financing agreement in part of the payment of interest, penalty, fine, late fee, commission fees.

9. The size of the remuneration for the services of the guarantee fund is established by the corresponding authorized body of the guarantee fund.

10. The selection of clients' obligations for the provision of guarantees by the guarantee fund and the requirements for clients' obligations are regulated by the internal documents of the guarantee fund.

11. Guarantees are provided in the national currency, except for the issuance of guarantees to export-oriented and import-substituting subjects of entrepreneurship, to whom guarantees may be issued in foreign currency, if the guarantee fund has assets in foreign currency.

12. The guarantee fund, for the purpose of organizing work on risk assessment when concluding, changing and monitoring the execution of guarantee agreements, has the right to conclude an agreement on the exchange of credit information with a credit bureau and, in accordance with this agreement, must provide credit information to the credit bureau in accordance with the established requirements of the legislation of the Kyrgyz Republic.

The guarantee fund must provide credit information (with the exception of information on portfolio guarantees) to the credit bureau with the consent of the client, except in cases where negative credit information is provided.

13. In the event that the guarantee fund concludes an agreement on the exchange of credit information with a credit bureau, its internal documents on the management of guarantee activities must contain the procedure and requirements regarding the organization of work on the exchange of credit information, as well as the main conditions, rights and obligations of the guarantee fund when concluding an agreement on the exchange of credit information with a credit bureau, including:

• on ensuring the storage and protection of credit information from unauthorized access, destruction, alteration, use or disclosure;

• on the prohibition of disclosure of information by the guarantee fund and its employees who have gained access to information in the process of exchanging credit information, as well as after the termination of their employment contract (contract);

• on timely notification to the credit bureau of changes and updates to credit information for which the guarantee fund is responsible;

• on making changes to credit information previously transmitted to the credit bureau in the event of providing incorrect information, including at the request of the subject of credit information and/or the credit bureau, regarding identified errors and discrepancies in the data;

• grounds for not including in negative credit information information about the subject of credit information in accordance with the requirements of the legislation of the Kyrgyz Republic;

• on ensuring uninterrupted operation of the data transmission system to the credit bureau in accordance with the agreement on the exchange of credit information.

The guarantee fund is responsible for distortion of credit information transmitted to the credit bureau, for the completeness of the transmitted information regarding all clients, for the timeliness of its transmission, including when correcting transmitted information due to technical errors, in accordance with the legislation of the Kyrgyz Republic and regulatory legal acts of the National Bank.

When considering the issue of issuing a guarantee, the guarantee fund may, if necessary, request information (credit report) about the client and, at the discretion of the guarantee fund, about persons associated with the client (if they have their consent in accordance with the legislation) in existing credit bureaus.

The guarantee fund must observe the confidentiality and security of the credit report received from the credit bureau, not disclose the credit information contained in it to third parties, and use the credit report only for the purposes established by the legislation on the exchange of credit information.

(As amended by the Resolution of the Board of the NB KR of October 23, 2025 No. 2025-P-12/55-3-(NPA))

Chapter 3. Economic norms, requirements and restrictions mandatory for compliance by guarantee funds

14. Guarantee funds must comply with the following economic norms, requirements and restrictions established by the National Bank:

• maximum risk size per one borrower;

• minimum size of authorized capital;

• minimum own capital ratio;

• liquidity ratio;

• limit on the size of deposits of the guarantee fund in a financial-credit organization;

• maximum size of financing coverage by guarantee;

• multiplier coefficient;

• restrictions on concentration risk;

• limit on guarantees for refinancing;

• limit on portfolio guarantees.

15. Maximum risk size per one borrower (K1)

The value of the maximum risk size per one borrower or group of related persons K1 must be maintained at a level of no more than 10%.

The calculation of the maximum risk size per one borrower or group of related persons is carried out by the formula:

K1 = SG / OC * 100%,

where:

SG - total amount of guarantees for one client or group of related persons on the evaluation date;

OC - own capital of the guarantee fund on the evaluation date.

When calculating the maximum risk size per one borrower or group of related persons, the balances of guarantees for different borrowers must be summed up and considered as a single total amount of guarantees if:

• financial difficulties of one borrower can lead to payment problems under financing agreements secured by guarantees for other persons;

• one borrower controls another;

• financing is issued to both a legal entity and a participant/founder of this legal entity;

• they have at least one controlling person or significant participant, except in cases where the controlling person or significant participant is a state body of the Kyrgyz Republic;

• there is significant financial interdependence between several borrowers. Significant financial interdependence, including an agreement on mutual cooperation, exists, as a rule, if 50 or more percent of the annual gross income/expense or other receipts or payments of one borrower arose from transactions with another borrower;

• the same source is used to repay financing, including a situation where borrowers use financing to participate in a joint venture or common activity, or when both use the same secondary source of repayment (collateral);

• one of the borrowers guaranteed the obligations of another (cross-guarantees), or when the same third party is a guarantor for both borrowers;

• funds received by one or several borrowers are used for the direct benefit of a third party, except for state bodies of the Kyrgyz Republic, or when funds or assets purchased with these received funds are transferred to a third party, except in cases of purchase of goods or services from it in the ordinary course of business;

• they have one pledgor, except in cases where the pledgor is a state body of the Kyrgyz Republic.

(As amended by the Resolution of the Board of the NB KR of June 27, 2025 No. 2025-P-12/31-1-(NPA))

16. Minimum size of authorized capital (K2)

The authorized capital of guarantee funds is formed in the national currency of the Kyrgyz Republic.

The minimum size of authorized capital and the terms of its formation for guarantee funds are established by the Resolution of the Board of the National Bank "On the minimum size of authorized capital of non-bank financial-credit organizations" of October 5, 2022 No. 2022-P-33/61-2-(NF KU).

Guarantee funds must maintain the value of the authorized capital size no lower than the established requirements for authorized capital.

17. Minimum own capital ratio (K2.1)

The minimum own capital ratio for a guarantee fund must be maintained at a level of no less than 100% of the size of the authorized capital.

The minimum own capital ratio of a guarantee fund is determined by the formula:

K2.1 = (OC / AC) * 100%,

where:

OC - own capital of the guarantee fund on the evaluation date;

AC - minimum size of authorized capital established by the National Bank for newly established guarantee funds.

Guarantee funds must calculate own capital (on the evaluation date) based on the following indicators:

• fully paid-up authorized capital;

• capital contributed above nominal value;

• additional capital contributed by individuals and legal entities;

• reserves for future needs;

• undistributed profit (losses) of previous years;

• minus current year losses.

18. Liquidity ratio (indicator) (K3):

• the value of the total liquidity ratio (indicator) (K3.1) must be maintained at a level of no less than 45%;

• the value of the short-term liquidity ratio (indicator) (K3.2) must be maintained at a level of no less than 35%.

1) The total liquidity ratio (indicator) is determined by the formula:

K3.1 = (LA / OB) * 100%,

where:

LA - liquid assets, which include cash in the cash register and on settlement (current) accounts in banks, deposits placed in banks, as well as state treasury bills and other highly liquid securities issued by the Cabinet of Ministers of the Kyrgyz Republic and the National Bank (hereinafter - highly liquid securities). These securities when calculating the liquidity ratio (indicator) are taken into account minus the premium (discount) and unrealized profit (loss);

OB - obligations of the guarantee fund, which include the total amount of off-balance sheet obligations for guarantees of the guarantee fund, any obligations with a maturity of up to 30 days.

2) The short-term liquidity ratio (indicator) is determined by the formula:

K3.2 = (HLA / SOB) * 100%,

where:

HLA - highly liquid assets, which include cash in the cash register and on settlement (current) accounts in the bank, as well as highly liquid securities;

SOB - short-term obligations, which include the amount of off-balance sheet obligations for guarantees of the guarantee fund, any obligations with a maturity of up to 30 days.

For the purpose of maintaining sufficient liquidity, the maturity dates of assets, obligations, as well as the probability of fulfillment of off-balance sheet obligations must be taken into account. Investment of guarantee fund funds in shares, bonds issued by issuers of the Kyrgyz Republic and foreign states (except for highly liquid securities) is not allowed.

19. Maximum size of financing coverage by guarantee (K4)

The value of the maximum size of financing coverage by guarantee K4 must be maintained at a level of no more than 50% of the volume of main obligations (principal amount of financing) of the client or group of related persons to the financial-credit organization/IFO.

The calculation of the maximum size of financing coverage by guarantee is carried out by the formula:

K4 = OG / OS * 100%,

where:

OG - total amount of guarantees provided to the client or group of related persons;

OS - total volume of main obligations for financing of the client or group of related persons, part of which is secured by a guarantee.

(As amended by the Resolution of the Board of the NB KR of June 27, 2025 No. 2025-P-12/31-1-(NPA))

20. Multiplier coefficient (K5)

The value of the multiplier coefficient (K5) must be maintained at a level of no more than 2.

The calculation of the multiplier coefficient is carried out by the formula:

K5 = GP / OC,

where:

GP - total amount of obligations under guarantees of the guarantee fund (guarantees