Microfinance in the Kyrgyz Republic

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Policy seminar on Women's Entrepreneurship Development in Central Asia

Geneva, Switzerland 19 September 2011

The National Bank of the Kyrgyz Republic

The population: 5.5 ml.

Urban: 1.9 ml. (35%)Rural: 3.6 ml. (65%)

• Nominal gross national product per capita in 2010 40 858 som or equivalent of 886 US $

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

1989 2000 2009 2010

Urban Rural

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About the Kyrgyz Republic

Population of the Kyrgyz Republic in 2011 by Gender

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Women 50,6% или

2,8 ml. person

Men 49,4% или

2,7 ml..person

Source: National statistical committee

The National Bank of the Kyrgyz Republic

Level of economic activity, employment

and unemployment rates in 2009

4

10,79,665,750,373,555,7c.Bishkek

9,611,366,047,672,953,7Chuy oblast

4,25,777,058,380,461,8Talas oblast

5,78,176,348,480,952,6Osh oblast

7,614,768,732,574,338,1Naryn oblast

8,211,170,345,176,650,7Issyk-Kul oblast

5,98,571,049,775,454,3Djalal-Abad oblast

7,214,870,043,375,450,8Batken oblast

7,49,870,747,976,353,1Kyrgyz Republic

menwomenmenwomenmenwomen

Unemploymentrate

Employment rateLevel of economic

activity

Number of managerial staff of businesses

as of 1.01.2010

75,924,16 4422 048c. Osh

62389 3995 772c.Bishkek

67,832,251 78124 611Chuy oblast

80,819,217 5934 190Talas oblast

83,116,967 86613 784Osh oblast

79,520,591 7338 192Naryn oblast

75,824,225 6048 159Issyk-Kul oblast

82,317,773 01915 670Djalal-Abad oblast

91,68,429 1252 677Batken oblast

78,621,4312 56285 103Kyrgyz Republic

menwomen

Relative density, %MenWomen

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Rural population

Urban population

General level

The general level of poverty 39.5% 23.6% 33.7%

Source: National Statistical Committee

Poverty l evel

21,9

22,623,2

23,6

41,7 36,8 37,139,5

35,0 31,7 31,733,7

0

5

10

15

20

25

30

35

40

45

2007 2008 2009 2010

Urban Rural General

5,3%Level of extreme poverty in 2010

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Vicious circle of inaccessibility of bank services

• High requirements of banks to

mortgaging

property

• Kinds of the mortgage: movable

property and a real

estate

High level

of poverty (33.7%) Low estimated mortgage

Inaccessibility of the bank services

Lack of financial resources

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The National Bank of the Kyrgyz Republic

Number of microfinance sector organizations

2001 – 31.08.2011

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 31.08.2011

MFO 0 0 72 104 136 168 233 291 359 397 430CU

278 349 303 305 320 305 272 248 238 217 199

22Number of commercial banks on 31.08.2011

8

MFO - 4 MFC, 314 MCC, 112 MCA

The National Bank of the Kyrgyz Republic

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Legal framework:� Civil Code of the Kyrgyz Republic� Law «On the National Bank of the Kyrgyz Republic »� Kyrgyz Republic Law «On Credit Unions»� Kyrgyz Republic law «On microfinance organisations »� Law «On banks and banking»� Law «On licensing»� Law «On business partnerships and societies»� Law «On company names»

The National Bank of the Kyrgyz Republic

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Rules and regulations of the NBKR:

� «On establishment of the microcredit companies and microcreditagencies in the territory of KR»

� «On licensing, reorganization and liquidation of the microfinancecompanies in the territory of KR»

� «On minimum qualifying requirements to the officials of the microfinance companies, licensed by the NBKR»

� «On licensing of the credit unions»� As well as Regulations about microfinance organizations and

Credit Unions»

The National Bank of the Kyrgyz Republic

50 mln. som (equivalent 1 mln. US $) - for MFC involving deposits

10 mln. som (equivalent 221 thousand US $)- for MFC not involving deposits

100 thousand som (equivalent 2 thousand US $)- for MCC having branches

50 thousand som (equivalent 1 thousand US $) - for MCC not having branches

Requirements to the minimum size of capital:

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The National Bank of the Kyrgyz Republic

500 thousand som (equivalent 11 thousand US $) - for CU involving deposits

30 thousand som (equivalent 660 US $)- for CU not involving deposits

For microcredit agency of the requirement under the authorized capital are absent.

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Requirements to the minimum size of capital:

The National Bank of the Kyrgyz Republic

The microfinancial organizations and the credit

unions can be created:

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• MFO - physical and legal persons -

residents and non-residents of the Kyrgyz

Republic

• CU - 10 and more physical persons -

residents of the Kyrgyz Republic, legal

persons - residents in the form of farms

and cooperatives

The National Bank of the Kyrgyz Republic

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Results of the Midterm Strategyof Microfinance Development

2006 – 2010

Plan Actual

Coverage of the population 4% 7%

Total number of borrowers 220 000 391 210

Total value of loans 7 billion Som11 billion Som

The National Bank of the Kyrgyz Republic

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Loan portfolio (ml.som):

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Number of borrowersMFOs and CUs (thousand people)

* Data of National statistics committee

The average size of the microcredits

in 2005 & 2010

58,2 thousand som (1 236 US $)

26,7 thousand som (568 US $)

25,9 thousand som (628 US $)

28,5 thousand som (691US $)

CUMFOCUMFO

20102005

97,496,696,5* Level of microcredits recovery, %

201020092008

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* Data of the National Bank of the Kyrgyz Republic

The average interest rates for credits in %

30,729,528,025,825,926,8CU

31,734,532,432,933,533,5MFO

2010 2009 2008 2007 2006 2005

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The National Bank of the Kyrgyz Republic

Women 72%

Men 28%

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Number of borrowers MFOs and CUsas of 31.12.2010

The National Bank of the Kyrgyz Republic

Geographical scope by services of commercial banks

and the organizations microfinance sector in

% as of 31 May 2011

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Deposits 2005 - 2010

26,9 ml.som(571 US $)

---The average size of the deposit

35,0 ml.som(743 thousand US $)

---In total depositors

1 298---Depositors

CUМFОСUМFО

20102005

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The National Bank of the Kyrgyz Republic

Examples of Successful microfinancingEach of them shows the example that it is possible to change the world

around as for a better future.The world is created by us.

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What can we do for the country? Being the best and successful will help to the dev elopment of the country.

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Examples of Successful microfinancing

We create our future, the future of our children

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Examples of Successful microfinancing

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Improvement of the national legislation:

-expansion of the list of operations of the CUs

-permission to carry out operations on remittances (under the contract with bank)

-introduction of universal principles for protection of the rights of consumers

The National Bank of the Kyrgyz Republic

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Results of the Midterm Strategyfor Microfinance Development

2006 – 2010Plan Actual

Coverage of the population 4% 7%

Total number of borrowers 220 000 391 210

Total value of loans 7 billion Som11 billion Som

The National Bank of the Kyrgyz Republic

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Objectives of the Microfinance Development Strategy for 2011 – 2015

•Growth of level of availability of financial services•Growth of financial literacy of the population and protection of the rights of financial market consumers•Optimization and harmonization of legislative and regulatory environment•Promotion of new products in the microfinance market

The National Bank of the Kyrgyz Republic

Meerim Satkeeva

myfortuna@bk.ru+ 996 543 171027

National bank of the Kyrgyz RepublicKyrgyz Republic, 720040, city Bishkek, str. Umetalieva, 101 Tel: +996 312 669254 Fax: +996 312 454458 E-mail: msatkeyeva@nbkr.kg Website: www.nbkr.kg

Thanks for attention!

The National Bank of the Kyrgyz Republic