The Cabinet of Ministers of Kyrgyzstan has approved a new Regulation regarding the procedure for working with budgetary loans. The decree was signed by the Prime Minister Adylbek Kasymaliev.
The document was developed with the aim of providing state support through the mechanism of budgetary lending. This is necessary to ensure sustainable economic growth, the development of various sectors, the modernization of infrastructure and utility systems, as well as to strengthen the food, energy, and economic security of the country.
Content of the New Regulation
The new Regulation establishes a unified procedure for the administration, monitoring, and repayment of budgetary loans allocated from the republican budget and other sources, including leasing operations.
The main goal of budgetary lending is to support economic growth and infrastructure development, as well as to ensure national security in various areas.
The decision to allocate budgetary loans is made by the Cabinet of Ministers. Loans can be provided both in cash and in the form of goods and material resources.
The main conditions for obtaining a loan include: targeted use of funds, repayability, timeliness, cost, security, and confirmed creditworthiness of the borrower, excluding the presence of tax and credit debts.
Interest Rates and Loan Terms
Interest rates will vary depending on the type of project:
- social and infrastructure projects — from 1% to 3% per annum;
- infrastructure projects for state companies — 4–5%;
- commercial projects — from 6%;
- projects using foreign financing — according to the terms of international agreements.
- short-term — up to 1 year;
- medium-term — up to 3 years;
- long-term — over 3 years.
Control over the targeted use of funds will be carried out through a banking support mechanism, with the opening of a separate account for the budgetary loan and the use of online reporting.
The administration of budgetary loans will be entrusted to credit agents, whose expenses will be covered by part of the interest income.
Special Conditions and Liability
Special conditions are provided for startup projects — with a mandatory own contribution from the applicant of at least 30%, while the budget bears the risks. A special procedure is also established for the Deposit Protection Agency in case of insufficient funds in the Deposit Protection Fund.
Each year, monitoring of the state of budgetary loans and the financial situation of borrowers will be conducted.
For non-compliance with obligations, penalties are provided — a fine of up to double the interest rate. In the event of force majeure circumstances, the accrual of penalties may be suspended.
Restructuring of budgetary loans is also allowed, including changes to terms, interest rates, and payment schedules, by decision of the Cabinet of Ministers with the approval of the Jogorku Kenesh.
The procedure for debt recovery has been defined, which includes early recovery, judicial and extrajudicial procedures, as well as the possibility of debt repayment through property.
Bad debts may be written off in cases established by law, such as liquidation or bankruptcy of the borrower, their death, and other grounds, exclusively by decision of the Cabinet of Ministers and the Jogorku Kenesh.
In addition, requirements for transparency are being strengthened: information about budgetary lending projects must be posted on official websites and covered in the media.
