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Parliament of Kyrgyzstan passes bill restricting usury.

The Parliament of Kyrgyzstan on Thursday approved the bill in the first reading restricting usury in Kyrgyzstan, which was initiated by Ata Meken faction leader Omurbek Tekebaev. Citizens may sign money lending agreements at interest rates they need, but in case of a lawsuit, the court will take into account the interest rate annually set by the National Bank of Kyrgyzstan. The bill defines the maximum allowed interest rate, high interest rate, borrowing, borrower, lender, usurer, usury, usurious interest rates. The maximum allowed interest rate should not exceed the average weighted nominal interest rate set by the National Bank of Kyrgyzstan plus 15%. The average weighted nominal interest rate for recently issued loans is calculated by the National Bank monthly and is published on its website. The methodology of calculation of the average weighted interest rate is also determined by the National Bank of Kyrgyzstan. "Microcredit organizations, pawnshops function not transparently nowadays, they have turned in fact into shadow banking structures beyond the state regulation and supervision of the National Bank," MP Tekebaev said in his justification note for the bill. "Interest rates are set not per annum, even not per month, but per day. In average, they vary at the market at 5-10% a month or one percent a day. So, the per annum remuneration rate is from 60% to 365%, which is 20 times higher than a loan from a bank," the lawmaker explained.

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Publication:AKIpress News Agency
Geographic Code:9KYRG
Date:Feb 1, 2013
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