Microfinance in the Kyrgyz Republic Policy seminar on Women's Entrepreneurship Development in Central Asia Geneva, Switzerland 19 September 2011 1
About the Kyrgyz Republic The population: 5.5 ml. Urban: 1.9 ml. (35%) Rural: 3.6 ml. (65%) 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 1989 2000 2009 2010 Urban Rural Nominal gross national product per capita in 2010 40 858 som or equivalent of 886 US $ 2
Population of the Kyrgyz Republic in 2011 by Gender Men 49,4% или 2,7 ml..person Source: National statistical committee Women 50,6% или 2,8 ml. person 3
Level of economic activity, employment and unemployment rates in 2009 Level of economic activity Employment rate Unemployment rate women men women men women men Kyrgyz Republic 53,1 76,3 47,9 70,7 9,8 7,4 Batken oblast 50,8 75,4 43,3 70,0 14,8 7,2 Djalal-Abad oblast 54,3 75,4 49,7 71,0 8,5 5,9 Issyk-Kul oblast 50,7 76,6 45,1 70,3 11,1 8,2 Naryn oblast 38,1 74,3 32,5 68,7 14,7 7,6 Osh oblast 52,6 80,9 48,4 76,3 8,1 5,7 Talas oblast 61,8 80,4 58,3 77,0 5,7 4,2 Chuy oblast 53,7 72,9 47,6 66,0 11,3 9,6 c.bishkek 55,7 73,5 50,3 65,7 9,6 10,7 4
Number of managerial staff of businesses as of 1.01.2010 Women Men Relative density, % women men Kyrgyz Republic 85 103 312 562 21,4 78,6 Batken oblast 2 677 29 125 8,4 91,6 Djalal-Abad oblast 15 670 73 019 17,7 82,3 Issyk-Kul oblast 8 159 25 604 24,2 75,8 Naryn oblast 8 192 91 733 20,5 79,5 Osh oblast 13 784 67 866 16,9 83,1 Talas oblast 4 190 17 593 19,2 80,8 Chuy oblast 24 611 51 781 32,2 67,8 c.bishkek 5 772 9 399 38 62 c. Osh 2 048 6 442 24,1 75,9 5
Poverty level Rural population Urban population General level The general level of poverty 39.5% 23.6% 33.7% Level of extreme poverty in 2010 5,3% Source: National Statistical Committee 45 40 35 35,0 31,7 31,7 33,7 30 25 41,7 36,8 37,1 39,5 20 15 10 23,2 22,6 21,9 23,6 5 0 2007 2008 2009 2010 Urban Rural General 6
Vicious circle of inaccessibility of bank services High requirements of banks to mortgaging property High level of poverty (33.7%) Low estimated mortgage Kinds of the mortgage: movable property and a real estate Lack of financial resources Inaccessibility of the bank services 7
Number of microfinance sector organizations 2001 31.08.2011 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 31.08.2011 MFO CU 0 0 72 104 136 168 233 291 359 397 430 278 349 303 305 320 305 272 248 238 217 199 MFO-4 MFC, 314 MCC, 112 MCA Number of commercial banks on 31.08.2011 22 8
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» 9
Rules and regulations of the NBKR: «On establishment of the microcredit companies and microcredit agencies in the territory of KR» «On licensing, reorganization and liquidation of the microfinance companies 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» 10
Requirements to the minimum size of capital: 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 11
Requirements to the minimum size of capital: 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. 12
The microfinancialorganizations and the credit unions can be created: 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 13
Results of the Midterm Strategy of Microfinance Development 2006 2010 Plan Actual Coverage of the population 4% 7% Total number of borrowers 220 000 391 210 Total value of loans 7billion Som11billion Som 14
Loan portfolio (ml.som): 15
Number of borrowers MFOs and CUs (thousand people) 16
The average size of the microcredits in 2005 & 2010 2005 2010 MFO CU MFO CU 28,5 thousand som (691US $) 25,9 thousand som (628 US $) 26,7 thousand som (568 US $) 58,2 thousand som (1 236 US $) * Data of the National Bank of the Kyrgyz Republic 2008 2009 2010 * Level of microcredits recovery, % 96,5 96,6 97,4 * Data of National statistics committee 17
The average interest rates for credits in % 2005 2006 2007 2008 2009 2010 MFO 33,5 33,5 32,9 32,4 34,5 31,7 CU 26,8 25,9 25,8 28,0 29,5 30,7 18
Number of borrowers MFOs and CUs as of 31.12.2010 Men 28% Women 72% 19
Geographical scope by services of commercial banks and the organizations microfinance sector in % as of 31 May 2011 20
Deposits 2005-2010 2005 2010 МFО СU МFО CU Depositors - - - 1 298 In total depositors - - - 35,0 ml.som (743 thousand US $) The average size of the deposit - - - 26,9 ml.som (571 US $) 21
Examples of Successful microfinancing Each 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. 22
Examples of Successful microfinancing What can we do for the country? Being the best and successful will help to the development of the country. 23
Examples of Successful microfinancing We create our future, the future of our children 24
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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 26
Results of the Midterm Strategy for Microfinance Development 2006 2010 Plan Actual Coverage of the population 4% 7% Total number of borrowers 220 000 391 210 Total value of loans 7billion Som11billion Som 27
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 28
Thanks for attention! Meerim Satkeeva myfortuna@bk.ru + 996 543 171027 National bank of the Kyrgyz Republic Kyrgyz Republic, 720040, city Bishkek, str. Umetalieva, 101 Tel: +996 312 669254 Fax: +996 312 454458 E-mail: msatkeyeva@nbkr.kg Website: www.nbkr.kg