The bill on microfinance banks has received approval from the Senate.

Senators have approved a draft law aimed at developing microfinance activities, allowing for the establishment of microfinance banks. This was reported by the press service of the upper chamber of the Oliy Majlis.

The document was adopted by the Legislative Chamber in its first reading in August 2024. Its goal is to eliminate several restrictions on non-bank credit organizations to enable them to expand their range of services and attract additional financial resources.

First and foremost, after its adoption, microfinance organizations will be allowed to open deposit accounts for individuals. In other words, the Senate noted, the law creates a legal framework for the establishment of microfinance banks.

These banks will serve as a link between microfinance organizations (MFOs) and commercial banks. The draft law establishes the procedure for transforming MFOs into microfinance banks, and subsequently into commercial banks, as well as for reverse transitions.

The document also specifies the minimum charter capital required for a microfinance bank and the requirements for adhering to prudential norms. Moreover, they are prohibited from using names that are similar to existing or previously established banks and credit organizations to the point of confusion.

The Deputy Head of the Central Bank, Aborokhodja Turdaliev, announced in March the introduction of microfinance banks. These banks will operate at the regional level and focus on loans for microbusinesses, which should constitute at least 70% of their loan portfolio.

The charter capital of a microfinance bank will range from 50 to 500 billion sums. Banks that have not increased their capital to the required level will be able to transform into microfinance banks provided they work with small businesses.

Microfinance banks will be able to accept deposits up to 200 million sums and provide loans up to 5 billion sums. They will be prohibited from engaging in foreign trade operations and opening foreign correspondent accounts.

Earlier, Spot reported that the Central Bank limited the active operations of two banks for failing to meet capital requirements.