Kyrgyz authorities are moving to ease regulations surrounding credit history retention in an effort to stimulate the banking sector and provide indirect support to small and medium-sized enterprises. A draft law from the Ministry of Economy and Commerce has been submitted for public discussion.
The proposed changes would reduce the retention period for negative credit information from five years to three, and for positive information from seven years to five.
According to estimates by local economists, the credit portfolio of Kyrgyzstan’s commercial banks reached approximately $5.27 billion last year. The share of overdue loans stood at around $151 million, or about 2% of the total.
The ministry believes that easing access to credit will help stimulate entrepreneurial activity. Broader borrowing opportunities could support business development, increase employment, and generate additional tax revenue. As of now, approximately 1.5 million Kyrgyz citizens have a credit history, of whom 302,000 have negative records, including nearly 200,000 individuals blacklisted by financial institutions.
If the law is enacted, a substantial number of these citizens may regain access to formal banking services. Authorities also expect the reform to reduce reliance on shadow lending and curb dependence on microloans outside the official financial sector.
Under the internal policies of most commercial banks, a loan delinquency of more than 90 days typically qualifies as negative credit history, severely diminishing a borrower’s chances of securing new financing.
The bill has already passed its first reading in parliament. Given that it has been approved by the relevant ministries and agencies, its eventual adoption appears likely.
