National Bank of Kyrgyzstan intends to change online lending rules

16:17, 28 января 2025, Bishkek - 24.kg news agency , Artem SUVOROV

The National Bank of Kyrgyzstan has submitted for discussion a draft resolution designed to expand the structure of online lending and reduce the risk of fraud.

Earlier, the National Bank of the Kyrgyz Republic set limits for online loans: 200,000 soms under an agreement with a simple electronic signature and 300,000 soms — with an enhanced one. For clients who passed remote identification via video link, the limit is only 15,000 soms. These limits were introduced to mitigate credit risks, but they hindered the development of digital lending.

As noted, the growth of fraudulent activity prompted the National Bank to take more effective measures. The resolution of November 27, 2024 introduced the so-called «cooling-off period» — a minimum time interval between the conclusion of an online loan agreement and the transfer of funds to the borrower.

This gave citizens time to think over the decision and the opportunity to cancel the transaction in case of suspected fraud.

The draft of the new resolution introduces significant adjustments to the rules of online lending. The key innovation is an increase in the maximum amount of an online loan to 500,000 soms (or the equivalent in foreign currency).

However, this applies exclusively to targeted loans, the funds for which are transferred directly to the seller of goods or services.

According to the National Bank of the Kyrgyz Republic, this approach has a number of advantages:

Stimulation of small and medium-sized businesses. Expansion of installment programs will increase the availability of goods and services for the population, fostering development of entrepreneurship.
Targeted use of funds. Transfer of money directly to the seller eliminates the possibility of their misuse by the borrower.
Minimization of risks. Mandatory presence of an agreement between the bank and the seller (legal entity or individual entrepreneur) increases the transparency of transactions and reduces the risk of fraud.

The draft resolution also specifies the minimum terms of the «cooling-off period» for online loans not related to targeted purchases:

4 hours for loans from 50,001 soms to 100,000 soms;
12 hours for loans over 100,000 soms.

The «cooling-off period» is not applied to targeted loans, when funds are transferred directly to the seller.