2007年-世界发展银行全球_Kyrgyz_Republic_-_Financial_Sector_Assessment_26页_1mb

Financial Sector Assessment Summary: Kyrgyz Republic (2006 FSAP Update)

Core Content

This summary outlines the findings and recommendations of the 2006 Financial Sector Assessment Program (FSAP) Update for the Kyrgyz Republic. It highlights the structural and developmental issues in the country’s financial sector, emphasizing the need for reform in regulation, supervision, and access to finance. The report is part of the broader Financial System Stability Assessment (FSSA) and should be read in conjunction with it for a complete understanding of the sector's challenges and the policy recommendations.

Main Views and Key Information

1. Macro and Institutional Setting

• The Kyrgyz Republic's macroeconomic performance since the 2002 FSAP has been mixed, with growth in 2003–04, a contraction in 2005, and a moderate recovery in 2006.
• The current exchange rate regime is a managed float, and the som has appreciated against the US dollar, despite challenges in liquidity management.
• The external current account deficit reached 17% of GDP in 2006, expected to narrow to 12.5% in 2007.
• The financial sector is still in early stages of development, with limited financial deepening and high cash usage.

2. Access to Finance

• Access to finance remains among the lowest globally, with only about 5% of households having access to borrowing.
• By mid-2006, total credit to the private sector had increased fourfold from $71 million in 2002 to $331 million.
• Non-bank financial institutions (NBFIs) have expanded credit outreach, but their scale is still limited.
• The credit information bureau is being developed, and the NBKR is encouraged to enhance its use for better risk management.

3. Banking Sector Development

• The banking sector is dominated by foreign-owned institutions, which account for 71% of total system assets.
• The maturity of loans has increased, with 52.5% of loans having a maturity of over a year.
• Dollarization remains significant, with 70% of loans and deposits denominated in foreign currency, exposing the sector to indirect exchange rate risks.
• Subsidized credit lines, especially from Ayul Bank, distort market rates and need to be re-evaluated for targeted support to vulnerable groups.

4. Special Credit Institutions

• Ayul Bank and the Settlement and Savings Company (SSC) provide essential services but face challenges in privatization and risk management.
• Ayul Bank has a limited banking license and is under consideration for full privatization through a tender process.
• The SSC has expanded its lending activities, introducing new risks that require updated monitoring and supervision.

5. Capital Market

• The capital market is underdeveloped, with a limited government securities market and no secondary market for corporate bonds.
• The stock market is small and illiquid, with capitalization at 1.5% of GDP and turnover at 0.1% of GDP.
• A centralized depository for treasury bills is being considered, but it should only be implemented once it meets international standards.

6. Insurance Industry

• The insurance sector is underdeveloped, with only 13 licensed companies and low insurance penetration.
• Life insurance is limited, and non-life insurance accounts for 99.7% of total premiums.
• Regulatory and supervisory weaknesses, along with low public confidence, hinder the sector’s growth.
• A database and regular statistical bulletins are needed to improve transparency and market discipline.

7. Pension Reform

• The current pay-as-you-go (PAYGO) pension system has low coverage and benefits.
• A voluntary funded pillar is suggested before considering mandatory private pension funds.
• Strengthening the SSSRFM and developing the capital market are critical for future pension reforms.

8. Payment Systems

• The National Payments System Reform, launched in 2004, has made progress in modernizing payment infrastructure.
• A bulk clearing system for small value transactions was operational by October 2006.
• A Real-Time Gross Settlement (RTGS) system is expected to be fully operational in early 2008.
• The Treasury Automation Program aims to process all fiscal and quasi-fiscal payments through the banking system.

Key Recommendations

• Strengthen the regulatory and supervisory framework for non-bank financial institutions (NBFIs).
• Improve the legal and institutional environment to support financial intermediation and private sector growth.
• Enhance the capacity and independence of the National Bank of the Kyrgyz Republic (NBKR) and the State Service Agency for the Regulation and Supervision of Financial Markets (SSSRFM).
• Expand access to finance, especially for SMEs and the poor, by exploring alternative delivery mechanisms such as postal networks.
• Develop the capital market, including a strategy for government bonds and legal frameworks for asset-backed securities and municipal borrowing.
• Improve transparency and disclosure in the insurance sector and establish a robust regulatory framework.
• Enhance the PAYGO system with indexation mechanisms and reduce the transition period.
• Implement international standards for the depository system before moving treasury bill operations to a centralized depository.

Conclusion

The Kyrgyz Republic has made progress in financial sector reform, but challenges remain in regulation, supervision, and access to finance. Strengthening the legal and institutional environment, improving financial literacy, and expanding financial inclusion are key priorities. The report emphasizes the need for continued collaboration with international bodies, enhanced oversight, and the development of a more resilient and inclusive financial system.