ь NBKR: The problem of bad loans in Kyrgyzstan will be solved by the development of a loan culture.
Given the increased public attention to the problem of borrowers who for various reasons cannot repay their debts to commercial banks and nonbank institutions, the National Bank of the Kyrgyz Bank finds it necessary to clarify the situation.
First, there are borrowers who really suffered during the April and June 2010 events, but there are also borrowers who were unable to count their financial capabilities. Among the borrowers who addressed to the parliament of the Kyrgyz Republic, there are people who took out loans as early as in the 1990s and 2000s.
Second, borrowers who have addressed to the NBKR, as well as to commercial banks and nonbank financial institutions, are worked with on solving the problems of bad loans. The NBKR, commercial banks and NBFIs are ready to meet their borrowers and have practically solved all matters on borrowers affected by the events of 2010.
Third, the NBKR has already prepared a number of legal acts, which on one hand require commercial banks and NBFIs to fully disclose all the conditions of taking loans to the borrowers, and on the other hand are designed to promote financial literacy of the population.
It is necessary to note several trends which have emerged in recent years and led to the problem of increasing of bad loans. They include:
(а) the lack of financial literacy of services consumers, as a result of which they cannot objectively calculate future payments to repay loan funds and pay interest on them, evaluate their capabilities to implement their commitments to the lender in full and in time;
(б) significant risks of defaults as borrowers often take out loans in several banks and microfinance institutions. The number of such borrowers is especially high among clients of microfinance institutions since microloans are increasingly available and are issued without collateral;
(в) an analysis of the borrowers and the assessment of their financial capabilities by lenders – banks and MFOs – are not conducted properly.
All these factors give rise to problems of loan repayment by borrowers. Since the role of government in these matters is clearly defined by the legal framework, the solution of problems arising between the borrower and the lender is located exclusively in the legal plane. Laws should protect the rights of both lenders and borrowers/depositors. Laws should also promote the loan culture of all participants of the lender - borrower relationship and the formation of a clear understanding that the debts should be returned. Since banks and NBFI as financial intermediaries have obligations to their depositors, whose funds they operate, including issuing loans.
ь On May 14, 2012 Zina Asankozhoeva, the Chairman of the NBKR, attended the 27th meeting of the Central Banks' Governors' Club of Central Asia, Black Sea Region and Balkan Countries. The organizer of the meeting of the Club in Baku was the Central Bank of Azerbaijan.
Traditionally, the purpose of the Club meeting was to discuss mutual cooperation and exchange of experience between the central banks of member countries. The following topics were discussed during the meeting: “The Debt Crisis in the Euro Zone and Its Impact on the Non-EU Countries of Eurasia” and “The Global Financial Stability and the Role of Back-Cyclical Macro-Prudential Regulation in Emerging Markets.”
As part of the meeting of the Club the Chairman of the NBKR held talks with Chairmen of Central Banks of Russia, Azerbaijan, Turkey, Kazakhstan, etc. The meeting also included consideration of further cooperation and mutual assistance.
REFERENCE
The Club was founded in 1998 to promote cooperation, coordination and exchange of experiences among central banks in the region.
Currently, the Club consists of 21 member, including Kyrgyzstan. The entry of the Czech National Bank into the Club was officially confirmed at the meeting held on May 12.
Licenses/certificates are issued to the following NBFIs and foreign exchange offices:
1. Private Entrepreneur Emilbek Niyazbayevich Niyazbayev (the license No. 4942 as of 14/05/2012 for conducting exchange operations with foreign currency in cash), the registration No. 2974. Registered address: 150 Abdrakhmanov Street, Bishkek.
2. Private Entrepreneur Jolchubay Djambulovich Achekov (the license No. 4943 as of 15/05/2012 for conducting exchange operations with foreign currency in cash), the registration No. 2975. Registered address: site No. 32, Central Aisle, Dordoi Market, Bishkek.
3. Astra Pawnshop ALC (the license No. 4944 as of 15/05/2012 for conducting exchange operations with foreign currency in cash), the registration No. 2976. Registered address: 6/2 Baytik Baatir Street, Bishkek.
4. Private Entrepreneur Gulsara Galiakparovna Djoldoshbayeva (the license No. 4945 as of 16/05/2012 for conducting exchange operations with foreign currency in cash), the registration No. 2977. Registered address: 143 Almatinskaya Street, Alamedin Village, Alamedin District, Chui Oblast.
5. Private Entrepreneur Akramjan Turganovich Zaitov (the license No. 4946 as of 16/05/2012 for conducting exchange operations with foreign currency in cash), the registration No. 2978. Registered address: Madina Trading House, 4B, Chui Avenue, Bishkek.
6. Private Entrepreneur Ikramdin Shakirovich Ismanov (the license No. 4947 as of 17/05/2012 for conducting exchange operations with foreign currency in cash). Registered address: Central Gate, Aybek Bazari LLC, Kyzyl Kiya, Batken Oblast.
7. Private Entrepreneur Mirzakhid Miraliyevich Mirjalilov (the license No. 4948 as of 17/05/2012 for conducting exchange operations with foreign currency in cash). Registered address: Central Gate, Aybek Bazari LLC, Kyzyl Kiya, Batken Oblast.
8. Dosmat Finans Microloan Company LLC (certificate of registration No. 458 as of 17/05/2012 for small lending to individuals and legal entities). Registered address: 6 Lomonosov Street, Osh, Osh Oblast.
Interbank Payments
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Indicators of interbank payment systems (IPS) |
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|
Total IPS |
Including |
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Clearing System |
Gross System |
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amount, KGS |
q-ty, pc. |
amount, KGS |
q-ty, pc. |
amount, KGS |
q-ty, pc. |
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Indicators for the period May 14-18, 2012 (reporting period) |
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Absolute Value |
14 595 418 265,87 |
46 978 |
1 606 304 917,66 |
43 546 |
12 989 113 348,21 |
3 432 |
|
|
Share in IPS payments (%) |
100,0 |
100,0 |
11,0 |
92,7 |
89,0 |
7,3 |
|
|
including (%) : |
|
|
|
|
|
|
|
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Net positions of the SIPC |
0,1 |
1,6 |
0,8 |
1,7 |
0,0 |
0,0 |
|
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Outgoing to the Central Treasury |
14,1 |
8,3 |
19,6 |
8,9 |
13,4 |
1,3 |
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|
Incoming to the Central Treasury |
22,3 |
37,3 |
20,6 |
40,1 |
22,5 |
2,3 |
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|
Outgoing to the Social Fund |
0,01 |
0,3 |
0,1 |
0,3 |
0,0 |
0,0 |
|
|
Incoming to the Social Fund |
0,6 |
6,0 |
5,9 |
6,5 |
0,0 |
0,0 |
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Average weekly indicators for the last month |
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Absolute Value |
12 085 215 566,66 |
43 711 |
1 281 189 646,12 |
40 963 |
10 804 025 920,54 |
2 749 |
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Deviation of indicators for the reporting period from the average weekly indicators for the last month |
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Absolute Value |
2 510 202 699,21 |
3 267 |
325 115 271,54 |
2 583 |
2 185 087 427,67 |
683 |
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% |
20,8 |
7,5 |
25,4 |
6,3 |
20,2 |
24,9 |
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Elcart System Indicators
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As of |
11/05/2012 |
18/05/2012 |
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The total number of issued cards (excluding re-issued) |
130 294 |
130 789 |
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The number of POS terminals: - in banks - in stores |
720 459 261 |
715 454 261 |
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The number of ATMs |
191 |
193 |