The National Bank of Kyrgyzstan proposes to increase online lending limits and relax the requirements for MFIs

The National Bank of Kyrgyzstan has put forward for public consultation a draft resolution amending a number of regulatory legal acts governing the activities of banks, microfinance organisations, credit unions and guarantee funds. The document aims to improve the lending system, develop remote financial services and increase access to credit.

One of the key changes will be an increase in the limits on remote lending for microfinance organisations. It is proposed to raise the maximum loan amount that can be arranged using a digital identifier from 15,000 to 100,000 KGS, and under a contract signed with a digital signature, to 200,000 KGS. In addition, there are plans to allow remote loans of up to 250,000 KGS if the funds are transferred directly to the seller of goods or services, without the borrower receiving cash.

The draft also provides for an increase in the lending limit based on scoring models. For new customers, this may rise to 200,000 KGS, and for regular borrowers with a positive credit history, to 250,000 KGS.

The changes will also affect the procedure for confirming the intended use of the loan. A report on the intended use will not be required for loans of up to 100,000 KGS, nor for loans of up to 250,000 KGS, provided the funds are transferred to the supplier of goods or services by non-cash means.

In addition, it is proposed to raise the threshold above which the consent of the borrower’s spouse and guarantor is required, from 100,000 KGS to 200,000 KGS.

The draft also clarifies the ‘cooling-off period’ mechanism for online loans. It will apply not only to the amount of a single loan, but also to the total outstanding debt incurred via remote channels over the last seven calendar days. For loans ranging from 50,001 to 100,000 KGS, the minimum waiting period will be four hours, and for amounts exceeding 100,000 KGS, it will be 12 hours. As noted by the National Bank of Kyrgyzstan, this should reduce the risk of fraud where malicious actors circumvent restrictions by taking out several loans of 50,000 KGS each.

According to the National Bank’s assessment, the proposed changes will improve access to credit for the public and businesses, expand the use of digital financial services, reduce administrative costs for financial institutions, and improve approaches to credit risk assessment.