Kyrgyz credit reforms discussed

By Asker Sultanov


BISHKEK – Conferees November 9 discussed "Ways to achieve stability in the Kyrgyz credit market," International Business Council employee Lidiya Savina told Central Asia Online.

Recently some Kyrgyz protesters expressed dissatisfaction with banks and micro-lenders, Savina said.

"Kyrgyzstan has 500 micro-lenders – only 37 of them registered with the Association of Micro-Credit Companies," she said. "The others do business without transparency, can close at any time, or change the terms of credit, causing (borrowers) to suffer."

"This conference was organised to restore order to the activities of micro-lenders," she added.

MP Ulugbek Kochkorov is sponsoring a bill that would make changes to the Kyrgyz civil code and to the law on collateral, making the micro-lending business more open. The bill would prevent lenders from extralegally seizing real estate that a borrower put up as collateral if the property in question was the borrower’s only residence, he said.

"Presently, the majority of micro-lenders establish differing (annual) interest rates – 30%, 70%," he told Central Asia Online. "We need to establish a maximum permissible interest rate for all micro-lenders."

Some oppose Kochkorov's view, however.

"We shouldn’t have restrictions," National Bank of Kyrgyzstan deputy chairman Zair Chokoyev said, criticising the proposed measure. "The market itself will take care of things. Borrowers need to pay more attention and not take on loan terms that they can’t bear."

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