Leasing through MFO

Target borrowers

Microfinance organizations that are residents of the Kyrgyz Republic, operating on the basis of a license or certificate of the National Bank of the Kyrgyz Republic (hereinafter referred to as the NBKR), having a stable financial position.

Purpose of a loan faciltiy

Leasing transactions.

Lessees can be small and medium-sized businesses operating and registered in the territory of the Kyrgyz Republic.

Purchase of agricultural machinery and equipment, industrial, food processing equipment, including:

  • agricultural machinery;
  • industrial equipment for food and processing enterprises;
  • equipment for logistics centers (warehouses, storages) for storing agricultural and finished food products;
  • sorting and packaging equipment;
  • equipment for agricultural and finished products outlets;
  • specialized vehicle for the construction of industrial facilities;
  • special equipment for road construction;
  • medical equipment;
  • telecommunication equipment;
  • equipment for mechanical engineering;
  • printing equipment
  • breeding cattle (dairy and/or meat, meat);

other types of equipment subject to the prior approval of  the RKDF Board (recorded in the minutes of the meeting of the RKDF Board)

According to the MFO, it is recommended to adhere to priority of goods produced in the Kyrgyz Republic and the Russian Federation.

In the framework of the Program, it is possible to purchase second-hand machinery and equipment, provided that the amount of depreciation of machinery and equipment is no more than 30% of the cost of the equipment and the useful lifetime exceeds the lease term.

Loan facility amount

70 million KGS - 200 million KGS.

The loan facility amount is determined by the decision of the RKDF Board, depending on the financial indicators of the microfinance organization and the estimated value of the collateralized property.


Up to 5 years for each tranche of the loan facility. It is possible to have a deferral for a loan principal repayment up to 12 months.

Interest rate

9% per annum for end lessees.

The microfinance organization is not entitled to charge the lessee any additional commissions and fees, including for early repayment charge.

Loan facility arrangement

The RKDF provides funding to a microfinance organization on agreed terms, within the established limit, in tranches.

The microfinance organization must disburse the tranche received from the RKDF within 30 days and provide the RKDF with a report on the tranche target-oriented utilization returning the tranche balance to the RKDF. The next tranche is disbursed only after the microfinance organization submits to the RKDF a satisfactory report on the previous tranche disbursement.

The maximum amount of one tranche is 10,000,000 (ten million) KGS.

Collate security

Microfinance organizations of the Kyrgyz Republic should provide the Fund with collateral that meets the criteria specified in the Regulation "On targeted funding of microfinance organizations by the Russian-Kyrgyz Development Fund" posted on the official website of the RKDF.

The term for the loan facility disbursement

· The lessee own contribution must be at least 15% of the leased asset value. Own contribution is made by the lessee in monetary terms.  It will be used as the first lease payment.

The lessee is obliged to deposit (separately from the own contribution) monetary resources to cover direct costs for customs clearance and registration, as well as funds to pay the insurance premium for the entire lease period.

· If an own contribution is  30% of the leased asset value, the repayment guarantee is the leased asset itself.

When an own contribution is up to 30% of the value of the leased asset, it is necessary to provide additional security in the form of real estate or liquid collateral.

Peculiarities of the loan facility for lease transactions funding

The RKDF provides funding to microfinance organization and is not a party of the leasing transaction.

The microfinance organization is a lessor and fully bears the risk of leasing transactions funds non-return by lessees.

The microfinance organization needs the following documents to confirm that the cattle are breeding:

  • Certificate of origin, individually for each head of the breeding cattle, certified by the Seller having the status of a breeding farm.
  • Breeding certificate and other documents.


Leased property and additional collateral security, if any, can be insured voluntarily.

The microfinance organization must be indicated in insurance policies as the Beneficiary to receive insurance compensation.


Principal repayment - in equal semi-annual installments after the expiration of the exemption period for the principal repayment.

Interest repayment - in quarterly installments.

The microfinance organization assumes the risk of non-repayment of debt for the leased asset by lessees.

Early repayment

Microfinance organizations are entitled to a loan facility early repayment to the RKDF without any penalties.

Lessees are entitled to a loan early repayment without any penalties.

Requirements for microfinance organizations

· Availability of a license or certificate from the NBKR;

· The absence of any sanctions of a material (in the opinion of the RKDF Board) nature on the part of the NBKR;

· The break-even activity over the past three years, confirmed by the statement of an independent audit company;

· Equity capital - at least 20 million KGS;

· Absence of overdue monetary obligations to the RKDF on the selected funds within the loan and interest and (or) on other funds placed by the RKDF;

· The share of classified loans should not exceed 10% of the total loan portfolio of a microfinance organization;

· Absence of unfinished legal proceedings of a material (in the opinion of the RKDF) nature, in which a commercial bank acts as the defendant, as well as processes for reorganization (prevention of bankruptcy)

In the event of the provision of highly liquid collateral (monetary resources, highly liquid securities), the above requirements may be revised by the decision of the RKDF Board.

Additional restrictions on breeding cattle leasing

The Lessee and the business, in case of the breeding cattle purchase, must comply with the Lessee Eligibility Criteria for the cattle purchase, specified in Annex No. 1 to this Loan Product.

Loan facility monitoring

The RKDF has the right to monitor the SMEs final beneficiaries. The microcredit organization undertakes to provide the RKDF with the following reports on the target-oriented funds disbursement:

  • a report on the target-oriented loan/tranche disbursement within 30 working days from the date of the disbursement of the next tranche;
  • a monthly report on the target-oriented disbursement of the RKDF funds by the 5th day of the month following the reporting;
  • annual report by the 20th day of the month following the end of the reporting year.

Financial status monitoring

A microfinance organization, within 20 calendar days following the reporting quarter, has to provide the RKDF with a quarterly report, which must contain information on the organization financial performance, compliance with mandatory economic standards, as well as other significant information.

The microfinance organization has to provide the RKDF (on an annual basis) with an audit report prepared in accordance with the requirements established by the legislation of the Kyrgyz Republic and international auditing standards.

Prohibited practices

Production of tobacco and tobacco products, alcoholic beverages, weapons, drugs with the exception of medicines, gambling, forced and child labor, other legally prohibited activities.

Sanctions and other requirements

If the microfinance organization violates the target purpose, conditions and criteria of target-oriented funding purpose, the interest rate for the microfinance organization is increased up to 20% per annum.

If the microfinance organization violates the purpose, conditions and criteria of target-oriented funding purpose, the RKDF is entitled to cancel the loan facility and demand early repayment of the outstanding amount.

In case of violation of the mandatory standards of the NBKR, as well as other regulations governing the activities of microfinance organizations, the RKDF has the right to cancel the loan facility and demand early repayment of the outstanding amount.

Issuance of cash in cash is not allowed. All payments for the equipment purchase must be made in a non-cash form from the account of the microfinance organization to the account of the equipment supplier.