Global microscope on the microfinance business environment 2012

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restrict credit fl ow to microfi nance.
l Credit bureau coverage has reached almost onethird
of the adult population. However, private
credit bureaus have little incentive to invest in
expanding data coverage beyond commercial
banking clients.
■ Kyrgyz Republic
Key characteristics and aspects of the
microfi nance business environment:
l As of April 30th 2012, there were 355
microcredit companies (MCCs), 102 microcredit
agencies (MCAs), four microfi nance companies
(MFCs) and 190 credit unions providing microcredit
in the Kyrgyz Republic. Low entry barriers have
resulted in the proliferation of very small
institutions.
l Only MFCs are allowed to take deposits. Only one
of the four MFCs in the country has begun actually
accepting deposits.
l While the capacity of the regulator to oversee
the microfi nance sector is acceptable, it faces a
challenge in supervising a sector that is growing in
the number and size of institutions.
Key changes and impacts since last year:
l The National Bank of the Kyrgyz Republic (NBKR,
the central bank) has said that the country’s
microfi nance sector is overheating, and that this
has been accompanied by growth in excessive
indebtedness.
l The political climate has focused more attention
on sensitive issues such as the level of interest
rates and client protection, with pressure for
measures such as the introduction of a cap on
interest rates. In late May 2012, the NBKR
suspended 94 small MFIs for charging excessive
interest rates.
l Work continues on plans to transform the
existing not-for-profi t credit bureau into a
commercial venture that would be in line with best
practices, with new product developments and
upgraded technology.
© The Economist Intelligence Unit Limited 2012
<strong>Global</strong> <strong>microscope</strong> on the microfi nance business environment 2012
■ Tajikistan
Key characteristics of the microfi nance business
environment:
l At end-March 2012, there were 45 microlending
funds (MLFs), 44 microlending organisations
(MLOs) and 33 microcredit deposit organisations
(MDOs) in Tajikistan. Only MDOs are allowed to take
deposits, and not all of these actually do so, owing
to limited demand for such services.
l The National Bank of Tajikistan (NBT, the central
bank) concentrates its supervision on commercial
banks and MDOs. Microfi nance organisations
(MFOs) that are not deposit-taking are only lightly
supervised.
l The business environment for microfi nance
remains hampered by the absence of an
operational credit bureau. There are hopes that
one will be up and running around mid-2013.
Key changes and impacts since last year:
l In April 2012, the president signed off a new law
for microfi nance organisations. While not radically
altering the legal environment for the sector, the
new law develops and refi nes the previous law from
2004.
l The new legislation requires MFOs to submit
interest rate information to clients—including all
fees and charges related to the granting and
servicing of microloans—prior to entering into
contracts. However, in general, transparency
requirements remain limited.
l The environment for deposit-taking has been
strengthened by the law on insurance of deposits
of individuals from August 2011, which set up a
deposit insurance fund. Participation of banks and
MDOs is compulsory.
■ Turkey
Key characteristics of the microfinance business
environment:
l Traditional microfi nance is dominated by two
institutions that have privileged status: Maya and
Turkish Grameen Microcredit Programme (TGMP).