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Appendix to the Resolution of the Board of the National Bank of the Kyrgyz Republic dated May 30, 2014 No. 24/11 |
RULES
for regulating the activities of microfinance organizations carrying out operations based on Islamic principles of banking and financing
(As amended by 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)
Chapter 1. General Provisions
1. These Rules for Regulating the Activities of Microfinance Organizations Carrying out Operations on Islamic Principles of Banking and Financing (hereinafter referred to as the Rules) apply to microfinance organizations carrying out operations in accordance with Islamic principles of banking and financing, as well as to microfinance organizations that have "Islamic window" (hereinafter - MFO).
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
2. The purpose of these Rules is to establish, in accordance with the laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic, banks and banking activity" and "On microfinance organizations in the Kyrgyz Republic", economic standards and requirements that are mandatory for implementation and compliance by MFOs.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
3. In order to comply with the economic standards specified in these Rules and reduce risks, microfinance organizations may, in their internal policies, establish internal limits on economic standards, which should be below the maximum and above the minimum limits established by the National Bank.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
4. (No longer valid in accordance with the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)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 on placement and attraction of funds (if indicated in the license) in accordance with the Islamic principles of banking and financing are carried out in accordance with standard agreements approved by the Shariah Council and the requirements of regulatory legal acts of the National Bank.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
6. Microfinance organizations formalize the provision of financing to clients/suppliers/partners (hereinafter referred to as the client) by a financing agreement in accordance with the requirements of the law, including under the subsidiary or joint liability of a group of persons.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
7. MFOs must keep records of their operations and prepare financial statements in accordance with the requirements of the National Bank.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
8. The MFO performs an internal audit to verify the accuracy of the accounts, assess the adequacy and effectiveness of its internal control system and its compliance with the regulatory legal acts of the Kyrgyz Republic. To do this, a microfinance company (hereinafter - MFC) is obliged, and a microcredit company (hereinafter - MCC) and a microcredit agency (hereinafter - MCA) can create their own internal audit service.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
8-1. Systemically important MFOs are those that are of systemic importance for the microfinance sector. Criteria of systemic significance are determined by the regulatory legal acts of the National Bank. Systemically important MFOs may be subject to a special regulatory and supervisory regime established by the National Bank.
(As amended by 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 refers to credit risk assets provided by FCOs for subsequent provision of financing to clients in accordance with the principles and conditions consistent with Sharia standards, in order to promote financial services and support entrepreneurial activity.
Wholesale finance MFO refers to an MFO with wholesale finance accounting for more than 70 percent of its funding portfolio.
(As amended by 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)
8-3. MFOs must carry out office work in the state and/or official languages. All internal documents, including agreements, contracts, agreements with counterparties, must be drawn up in the state or official languages. At the same time, it is allowed to draw up contracts with counterparties in the state and / or official and foreign languages, which have equal legal force. Drawing up contracts in a foreign language is allowed only if there is a duly certified translation into the state or official language.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
Chapter 2. Regulation of activities of microfinance companies that do not raise funds
9. MFC must have an internal funding policy approved by the Board of Directors that defines:
- main region of activity;
- direction of financing;
- products provided to customers;
- the maximum total amount of financing provided to the same client or a group of related persons, in the amount of not more than three percent of the minimum authorized capital established by the National Bank for a newly created MFC (not attracting funds from individuals and legal entities), taking into account the provisions of paragraph 10 of these Rules;
- (paragraph 6 has become invalid 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 aggregate amount of financing issued to the same client or group of related persons should not exceed 20 percent of equity.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
10. Provision of financing in excess of the maximum aggregate amount of financing provided by the MFC to the same client or group of related persons, established by paragraph 9 of these Rules, with the exception of the MFCs that accept funds from individuals and legal entities and / or engage in wholesale financing, is allowed for goals of expansion/development of the existing business, including the creation of additional jobs, in accordance with Article 2 of the Law "On Microfinance organizations in the Kyrgyz Republic", in the following areas of funding:
- trade;
- agriculture (including crop production, animal husbandry, harvesting/processing of agricultural products);
- services;
- transport;
- industry;
- ijara muntahiyya bittamlik;
- construction.
When microfinance companies provide financing in the areas specified in this paragraph, the following conditions must be met:
1) the microfinance company has a financing policy developed in accordance with the goals and objectives of microfinance with the definition of specific types of products and the procedure for subsequent monitoring of the targeted use of the provided financing;
2) the amount of financing provided, subject to the established conditions, should not exceed three million soms (or equivalent in foreign currency);
3) there is information from the Credit Information Bureau (CIB) regarding the client's credit history;
4) there are necessary documentary evidence of the client’s solvency (the rights of ownership of assets that generate the client’s income, a salary certificate from the client’s place of work, a patent, a certificate, etc.), as well as an assessment of the client’s solvency, confirmed by the conclusion of a responsible specialist in financing, or another MFC employee in accordance with the funding policy and / or other internal documents of the MFC;
5) the Application Form of the client for obtaining financing is submitted, while the Application Form for obtaining financing must indicate the purpose of using the provided financing with appropriate calculations and forecasts;
6) the client's debt coverage ratio is equal to the ratio of the client's total income to the monthly installment on the asset bearing credit risk (for the principal amount and markup), must be at least 130 percent.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
10-1. MFCs whose authorized capital exceeds the size of the authorized capital established for newly created MFCs, as well as the ratio of equity to the amount of authorized capital is at least 150 percent, have the right to issue financing to the same client or group of related persons, in the maximum aggregate amount financing of no more than two percent of the size of the current registered authorized capital of the MFC, with the exception of financing for the Ijara Muntahiya Bittamlik operation.
When issuing financing to the MFC in the amount specified in the first paragraph of this clause, in addition to the conditions specified in clause 10 of these Regulations, with the exception of subparagraphs 2 and 6 of this clause, the following conditions must be met:
1) the value of the margin/income on financing, with the exception of the value of profit on mudaraba and sharika/musharakah operations, should 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 amount of financing in the amount specified in the first paragraph of this paragraph should not exceed 50 percent of the MFC's financing portfolio;
3) the client's debt coverage ratio, equal to the ratio of the client's total income to the monthly installment (payments) on the asset bearing credit risk (for the principal amount and markup), must be at least 100 percent.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
11. The MFC must comply with the relevant requirements for the minimum amount of the authorized capital and the conditions for its formation, established in the Regulation "On Licensing the Activities of Microfinance Companies", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated December 23, 2015 No. 78/26 (hereinafter referred to as the Regulation "On Licensing the Activities of Microfinance Companies").
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
12. The calculation of MFC's equity (at the valuation date) is based on the following indicators:
- fully paid authorized capital;
- capital contributed in excess of the face value;
- additional capital contributed by individuals and legal entities;
- reserves for future needs;
- retained earnings/losses of previous years;
- losses of the current year;
- minus investments in capital (shares, equity participation) of other MFOs, leasing companies and banks.
The requirements for compliance with the MFC's minimum equity ratio are established by the National Bank.
At the same time, capital investments (shares, equity participation) mean the balance of funds actually invested in the capital of MFOs, leasing companies, and banks.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
13. The MFC has the right to invest in the capital of MFOs, leasing companies and banks whose activities do not contradict Shariah standards. At the same time, MFC investments in MFOs, leasing companies and banks must comply with the goals of MFOs, as defined by the Law "On Microfinance Organizations in the Kyrgyz Republic".
The maximum total amount of MFC investments (investments in capital (shares, equity participation), debt obligations, financial investments under the Ijara Muntahiya Bittamlik transaction and any other similar financial investments) in MFOs, leasing companies and banks should not exceed 30 percent of the equity MFC and is determined by the formula:
SI / SK Ч 100% ≤ 30%, where:
SI is MFC's total investment as of the valuation date;
SK - MFC's equity at the valuation date (clause 12 of these Rules).
When calculating this ratio, the financing provided by MFOs, leasing companies and banks, in whose capital (shares, equity participation) MFC investments are placed, is taken into account.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
13-1. (No longer valid 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. (No longer valid 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. (No longer valid 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)
14. Microfinance companies are not entitled to:
1) provide financing for the purchase of securities issued by the microfinance company itself, as well as accept them as collateral;
2) issue guarantees;
3) issue guarantees in an amount exceeding, together with the provided financing, the standard of the maximum amount of financing per client;
4) carry out other banking operations and transactions, except for the operations and transactions provided for by the Law "On Microfinance Organizations in the Kyrgyz Republic";
5) carry out professional activities in the securities market;
6) issue letters of credit, carry out transactions with precious metals and trust management of property.
15. Quarterly, no later than the twentieth day of the month following reporting , MFCs must submit to the National Bank, as part of periodic regulatory reporting, information on the implementation of economic standards.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
15-1. (No longer valid 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)
Chapter 3. Requirements for the activities of microfinance companies applying for a license for the right to raise funds
(No longer valid
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 activities of microfinance companies that raise funds
22. MFCs that have the right to conduct operations to raise funds are required to comply with the economic standards established by the National Bank, including:
- the minimum amount of paid authorized capital;
- the minimum amount of equity (M1);
- the capital adequacy ratio (M2);
- the maximum amount of risk per client (M3);
- the liquidity ratio (M4);
- risk limiting standard for the return of borrowed funds (M5);
- the maximum amount of risk on transactions with affiliated and related persons of the MFC;
- the maximum total debt of MFC employees to whom MFC has provided financing for consumer purposes;
- the maximum total amount of investments in microfinance organizations, leasing companies and banks;
- the amount of investment in non-government debt securities;
- (the paragraph became invalid 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)
- (the paragraph became invalid 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)
(As amended by 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)
23. MFCs that have the right to carry out operations to raise funds are not entitled to:
1) provide financing for the purchase of securities issued by the MFC itself, as well as accept them as collateral;
2) issue guarantees;
3) issue guarantees in an amount exceeding, together with the provided financing, the standard of the maximum amount of financing per client;
4) carry out other banking operations and transactions, except for the operations and transactions provided for by the Law "On Microfinance Organizations in the Kyrgyz Republic";
5) carry out professional activities in the securities market;
6) issue letters of credit, carry out transactions with precious metals and trust management of property.
Chapter 5. Economic standards and the procedure for their calculation for microfinance companies engaged in operations to raise funds
24. The following requirements for the authorized capital are established:
1) the minimum amount of the authorized capital and the conditions for its formation for MFCs carrying out operations to raise funds must comply with the requirements established in the Regulation "On Licensing the Activities of Microfinance Companies", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic;
2) MFCs must maintain the value of the size of the authorized capital not lower than the minimum requirements for the authorized capital of MFCs carrying out operations to raise funds established by the National Bank.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
25. The value of the minimum equity ratio (M1) must be maintained at a level of at least 100%.
MFC's minimum equity ratio (M1) is determined by the formula:
M1= SK / UK Ч 100%, where:
SK - MFC's equity at the valuation date (clause 12 of these Rules);
MK - the minimum authorized capital established for MFCs that attract funds (subparagraph 1 of paragraph 24 of these Rules).
26. The value of the capital adequacy ratio (M2) must be maintained at a level of at least 8 percent.
The MFC capital adequacy ratio is determined by the formula:
M2 = SK / SA Ч 100%, where:
SK - MFC's equity at the valuation date (clause 12 of these Rules);
SA - the amount of balance sheet assets as of the assessment date less the amount of deposits placed with commercial banks as collateral in the amount of the amount of funds raised in national currency for the purpose of hedging currency risks.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
27. The value of the maximum risk limit per client (M3) is set at no more than 5%;
The calculation of the maximum risk limit per client is made according to the formula:
M3 = SZ / SK Ч 100%, where:
SZ - the total debt of the client for the provided financing (regardless of maturity), under the Ijara muntahiyya bittamlik transaction as of the valuation date;
SK is MFC's equity at the valuation date.
This regulation does not apply to MFCs engaged in wholesale financing.
When calculating the maximum risk per client, any debt of various clients should be summed up and considered as a single risk if:
- one client is controlled by another client;
- several clients are controlled by the same person;
- non-repayment of debts by one client will inevitably lead to problems with the repayment of debts of another client;
- the same source is used to repay the debt, including the secondary source of repayment (collateral).
Note. In this paragraph, control means the ability to directly or indirectly determine decisions or influence decisions, including by virtue of an agreement (including an oral agreement) or other transaction.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
28. The value of the liquidity ratio (M 4 ) is set at a level not lower than 30%.
The liquidity ratio for MFCs that raise funds is determined by the formula:
M 4 = LA / OB Ч 100%, where:
LA - MFC's liquid assets, which include: cash (cash); funds on settlement and deposit (with a maturity not exceeding 30 days from the date of assessment) bank accounts; securities of the Government of the Kyrgyz Republic and securities of the National Bank, which can be converted into cash within 30 days from the date of valuation;
OB - liabilities of the MFC, including borrowed funds with a maturity of not more than 30 days.
MFC should develop a liquidity risk management policy considering the following factors:
- as a minimum, weekly measurement and monitoring of the sufficiency of the MFC's assets to control the need for liquidity and meet the obligations that have arisen;
- the structure and sustainability of the base of borrowed funds (terms for the return of borrowed funds, the concentration of sources, the policy for determining the amount of margins);
- the ability to borrow in the market;
- planning for liquidity crisis cases.
29. The risk limitation ratio for the return of borrowed funds (M5) is set at a level not lower than 100% and is determined by the formula:
M5 = K / B Ч 100%, where:
K - financing , for which there is no overdue debt on the amount of the markup or the principal amount at the date of assessment;
B - the amount of funds raised as of the valuation date.
30. The following restrictions are imposed on transactions with affiliated and related persons of the MFC:
1) MFCs that attract funds must carry out transactions with affiliated and related entities in accordance with the Instruction "On the requirements for operations of microfinance companies attracting deposits with entities affiliated and associated with a microfinance company", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic . The maximum amount of risk on transactions with affiliated and related persons of the MFC, expressed as the amount of the total debt of the affiliated and related persons of the MFC to the MFC, should not exceed 60 percent of the equity capital of the MFC;
2) transactions for the provision of financing for consumer purposes by employees of the MFC may be carried out only subject to the following requirements:
- financing must be provided at least 100% by the salaries of employees or deposits, which are formalized by an appropriate pledge agreement, and the maturity of which does not occur earlier than the maturity of the amount of financing for consumer purposes;
- financing must be provided on terms and conditions (margin, collateral, terms of financing) that are not inferior to the conditions and requirements applicable when providing financing to persons who are not employees of the MFC.
The total debt of MFC employees to whom MFC has provided financing for consumer purposes must not exceed 5% of MFC's equity capital and is determined by the formula:
SZS / SK Ч 100% ≤ 5%, where:
SZS is the total debt of MFC employees to whom MFC has provided financing for consumer purposes as of the valuation date;
SK is MFC's equity at the valuation date.
Operations to provide financing to officials and employees of the MFC can be carried out only subject to the requirements specified in the Instruction "On the requirements for operations of microfinance companies attracting deposits with persons affiliated and associated with a microfinance company", approved by the Resolution of the Board of the National Bank of the Kyrgyz Republic.
(As amended by the Resolutions of the Board of the National Bank of the Kyrgyz Republic dated June 15, 2017 No. 2017-P-12/25-12, January 31, 2018 No. 2018-P-12/4-6)
31. The following requirements are established in terms of the total amount in MFOs, leasing companies and banks:
1) MFC has the right to invest in the capital of MFOs, leasing companies and banks, the activities of which do not contradict Shariah standards. At the same time, MFC investments in MFOs, leasing companies and banks must comply with the goals of MFOs, defined by the Law "On Microfinance Organizations in the Kyrgyz Republic.";
2) The maximum total amount of MFC investments (investments in capital (shares, equity participation), debt obligations, financial investments under the Ijara Muntahiya Bittamlik transaction and any other similar financial investments) in MFOs, leasing companies and banks, should not exceed 30 percent of the amount equity of the MFC and is calculated in accordance with paragraph 13 of these Rules.
When calculating this ratio, the provided financing to MFOs, leasing companies and banks, in whose capital (shares, equity participation) MFC investments are placed, is taken into account.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
32. MFC's total investment in non-government debt securities that comply with Islamic finance principles should not exceed 50% of MFC's equity capital.
32-1. (No longer valid 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)
32-2. (No longer valid 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)
Chapter 6. Procedure and terms for providing information on compliance with economic standards, regulatory and other reporting
33. Microfinance companies should monitor compliance with economic regulations and the requirements of the National Bank, at least on a weekly basis.
34. Verification of compliance with economic standards and requirements established for the MFC may be carried out by the National Bank as of any date.
35. Monthly, no later than the twentieth day of the month following reporting , MFCs must submit to the National Bank, as part of periodic regulatory reporting, information on the implementation of economic standards.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
36. (Repealed 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)
37. (No longer valid 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)
38. If facts of non-compliance by microfinance companies with economic standards and other requirements, failure to provide information, as well as untimely provision or provision of false information, the National Bank has the right to apply enforcement measures to the MFC in accordance with the Laws of the Kyrgyz Republic "On the National Bank of the Kyrgyz Republic, banks and Banking Activities”, “On Microfinance Organizations in the Kyrgyz Republic” and relevant regulatory legal acts of the National Bank.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 15, 2017 No. 2017-P-12/25-12)
Chapter 7. Regulation of activities of microcredit companies and microcredit agencies
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
39. MCCs or MCAs are not entitled to issue securities, except for shares issued by MCCs in the form of joint-stock companies, and are also not entitled to carry out other banking operations not provided for by Article 33 of the Law of the Kyrgyz Republic "On Microfinance Organizations in the Kyrgyz Republic", with the exception of deals Ijara Muntahiyya Bittamlik.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
40. The maximum aggregate amount of financing issued by an MCC to the same person or group of related persons should be determined in the amount of no more than ten percent of the minimum authorized capital established by the National Bank for a newly created MCC.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
41. For MCCs engaged in wholesale financing, the maximum aggregate amount of financing issued to the same client or group of related persons should not exceed twenty percent of the equity capital.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
42. The issuance of financing in excess of the maximum total amount of financing issued by a microcredit company to the same client or group of related persons, established by paragraph 40 of these Rules, with the exception of MFOs engaged in wholesale financing, is allowed for the purposes of expanding / developing an existing business, including the creation additional jobs, in accordance with Article 2 of the Law of the Kyrgyz Republic "On Microfinance Organizations in the Kyrgyz Republic", in the following areas of financing:
- trade;
- agriculture (including crop production, animal husbandry, harvesting/processing of agricultural products);
- services;
- transport;
- industry;
- Ijara Muntahiya Bittamlik (provision of equipment, agricultural machinery);
- construction.
When issuing funding to the MCC in the areas indicated in the first paragraph of this paragraph, the following conditions must be met:
1) the MCC has a financing policy developed in accordance with the goals and objectives of microfinance with the definition of specific types of products and the procedure for subsequent monitoring of the targeted use of the provided financing;
2) the amount of such financing, subject to the established conditions, should not exceed 1,000,000 (one million) soms, with the exception of financing under the Ijara Muntahiya Bittamlik transaction;
3) the maximum total amount of financing under the Ijara Muntahiya Bittamlik transaction should not exceed 10 percent of equity;
4) the availability of relevant information from the Credit Information Bureau (hereinafter - CIB ) regarding the applicant's credit history, including on overdue financing previously received by the applicant, as well as information on whether the applicant acts as a guarantor for any other financing;
5) the availability of the necessary documentary evidence of the applicant’s solvency (the right to own assets that generate the applicant’s income, a certificate of salary from the place of work, a patent, a certificate, etc.), as well as an assessment of the applicant’s solvency, confirmed by the conclusion of a responsible finance specialist or employee in accordance with the financing policy and/or other internal documents of the MCC;
6) submission of the Questionnaire-Application for the receipt of financing of the applicant, while the Questionnaire-Application for the receipt of financing must indicate the purpose of the use of financing with the corresponding calculations and forecasts;
7) the client's debt coverage ratio, equal to the ratio of the client's total income to the monthly installment on the asset bearing credit risk (for the principal amount and markup), must be at least 130 percent.
(As amended by 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)
42-1. MCCs whose authorized capital exceeds the size of the authorized capital established for newly created MCCs, and also if the ratio of equity capital to the amount of authorized capital is at least 150 percent, have the right to issue financing to the same client or group of related persons, in the maximum total the amount of financing is not more than two percent of the size of the current registered authorized capital of the MCC, with the exception of financing for the Ijara Muntahiya Bittamlik operation.
When issuing funding to the MCC in the amount specified in the first paragraph of this clause, in addition to the conditions specified in clause 42 of these Regulations, with the exception of subparagraphs 2 and 7 of this clause, the following conditions must be met:
1) the value of the margin/income on financing, with the exception of the value of profit on mudaraba and sharika/musharakah operations, should not exceed the maximum allowable percentage calculated based on the discount rate of the National Bank plus 20 percent;
2) the total amount of financing in the amount specified in the first paragraph of this paragraph should not exceed 50 percent of the financing portfolio of the MCC;
3) the client's debt coverage ratio, equal to the ratio of the client's total income to the monthly installment (payments) on the asset bearing credit risk (for the principal amount and markup), must be at least 100 percent.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
43. Funds raised by MFOs from legal entities and founders (shareholders) must comply with Islamic principles of banking and financing.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 31, 2018 No. 2018-P-12/4-6)
43.1. (No longer valid 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)
44. For MCCs engaged in wholesale financing and having obligations to creditors (including FCOs), establish a capital adequacy standard.
The value of the capital adequacy ratio M 2 must be maintained at a level of at least 15 percent.
The capital adequacy ratio is determined by the formula:
M2 = SK / SA * 100%, where:
SK - MCC's equity as of the valuation date;
SA - the amount of balance sheet assets as of the valuation date minus the amount of funds raised from clients (deposits) placed with FCO as collateral in the amount of the amount of funds raised in national currency for the purpose of hedging currency risks.
(As amended by 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)
45. The calculation of the equity capital of the MCC (as of the date of assessment) is based on the following indicators:
- Paid up authorized capital (value of common and preferred shares, or share capital);
- capital contributed in excess of the face value (for joint-stock companies);
- additional capital contributed by individuals and legal entities;
- reserves for future needs;
- retained earnings/losses of previous years;
- losses of the current year;
- minus investments in capital (shares, equity participation) of other MFOs, leasing companies and banks.
At the same time, capital investments (shares, equity participation) mean the balance of funds actually invested in the capital of MFOs, leasing companies, and banks.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated January 20, 2016 No. 4/6)
46. The MCA issues financing (secured and unsecured financing) in the national currency at the expense of its own funds and borrowed funds, including from FCOs and / or international financial organizations on the terms agreed with the client in accordance with the statutory goals of the non-profit organization, determined by the participants microcredit agency.
(As amended by the Resolution 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)
47. The maximum total amount of financing, including for the Ijara Muntahiya Bittamlik transaction, issued by the MCA to the same client or group of related persons, should be determined in the amount of no more than 500 thousand soms. At the same time, financing issued to the same client or a group of related persons, in an amount not exceeding 100 thousand soms, must be 20 percent or more of the total MCA financing portfolio.
(As amended by the Resolution of the Board of the National Bank of the Kyrgyz Republic dated June 15, 2016 No. 25/2)
48. (No longer valid 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)
