July 29, 2024

Record registration of microfinance organizations in the Republic of Uzbekistan

According to the Law of the Republic of Uzbekistan “On non-bank credit organizations and microfinance activities” No. 765 dated 20.04.2022, the activities of legal entities to provide the following services are recognized as microfinance activities:

  • granting a microloan – monetary funds granted to a borrower – natural person in the amount not exceeding one hundred million soums, on the terms of payment, urgency and repayment;
  • granting a microcredit – funds issued to a borrower – a business entity or a self-employed person in an amount not exceeding three hundred million soums, on the terms of payment, urgency and repayment, as well as their use for certain purposes in cases stipulated by the contract;
  • provision of loans and guarantees, provision of Islamic financing services to individuals in the amount not exceeding the amount of microloan;
  • providing leasing and guarantees, factoring services and Islamic financing services to business entities in an amount not exceeding the amount of a microloan.

Microfinance activities may be carried out by (1) banks, (2) microfinance and (3) payment organizations, as well as (4) pawnshops in terms of microloans. In order to carry out the activity of a pawnshop, it will be necessary to notify the Central Bank about the beginning of its activity. The activity of a microfinance organization is carried out after registration with the Central Bank. It should also be noted that in order for a payment organization to operate as a microfinance organization, it must also undergo the same registration with the Central Bank as a microfinance organization.

The following are the main stages of registration of a microfinance organization (MFО):

№ Steps Required actions Terms Documents Format of documents
1.         Establishment of a legal entity in the Republic of Uzbekistan –         all necessary corporate approvals, consents and decisions are taken;

–         a package of constituent documents is prepared;

–         when establishing a legal entity it is necessary to take into account the following requirements to the authorized capital (1.1) and the composition of participants of the legal entity (1.2).

 10-20 days 1) constituent documents;

2) powers of attorney;

3) decision of authorized bodies or persons, each of the founders.

 Originals of all documents
1.1.    Requirements to the authorized capital of MFO The minimum amount of the authorized capital of MFIs shall be 2 billion sums (approximately 159,000 USD at the exchange rate of the Central Bank of Uzbekistan as of 01.07.2024).
1.2.    Requirements for founders of MFO The following persons cannot directly or indirectly own shares in the authorized capital of MFIs:

–         individuals who are residents and (or) reside in a state or territory that provides a favorable tax regime and (or) does not provide for disclosure of the identity of the beneficial owner and provision of information on financial transactions;

–         legal entities registered or in which a member of the governing body is a resident, resides or is registered in a state or territory providing a favorable tax regime and (or) not providing for disclosure of the identity of the beneficial owner and provision of information on financial transactions;

–         individuals who do not meet the requirements for business reputation specified in Law No. 765 of 20.04.2022;

–         legal entities in which a member of the management body does not meet the requirements for business reputation specified in Law No. 765 of 20.04.2022;

–         persons recognized as bankrupt;

–         political parties, trade unions, religious organizations;

–         state bodies, except for cases provided for by the legislation;

–         other MFIs operating in the territory of the Republic of Uzbekistan
2.         Preparation and submission of documents to the Central Bank for registration The Applicant shall submit documents directly to the Central Bank (1) in writing or (2) in electronic form by e-mail. Within 3 months after the state registration of the legal entity 1) Application; In electronic or written form in Russian or Uzbek language. Documents and acts coming from foreign countries must be legalized or apostilled with a notarized translation into Russian or Uzbek; In electronic or written form in Russian or Uzbek language. Documents and acts emanating from foreign countries must be legalized or apostilled with a notarized translation into Russian or Uzbek.
2) Information on the founder – a natural person;
3) Certificate of absence of criminal record of the founder – natural person;
4) Information on the founder – legal entity;
5) Information on members of the management body of the founder – legal entity;
6) Certificate of absence of criminal record of members of the founder’s management body – legal entity;
7) Information on the sources of funds contributed to form the authorized capital of the MFI;              
8) Information on the MFI’s management staff;     
9) certificate on absence of criminal record of the MFI’s managing employees;
10) a document confirming relevant higher education or sufficient work experience in the MFI’s management staff.
3.         Positive decision of the Central Bank Central Bank of Uzbekistan considers the submitted documents for registration. From 15 to 25 working days
4.         Notification of the applicant by the Central Bank Central Bank of Uzbekistan sends to the microfinance organization a notice of inclusion in the register. No later than 1 working day