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The document ceased to be valid since  May 4, 2019 according to part 5 of article 24 of the Law of the Kyrgyz Republic of  April 12, 2019 No. 45

LAW OF THE KYRGYZ REPUBLIC

of July 30, 2013 No. 167

About guarantee funds in the Kyrgyz Republic

(as amended of the Law of the Kyrgyz Republic of 26.10.2016 No. 172)

Accepted by Jogorku Kenesh of the Kyrgyz Republic on June 20, 2013

This Law determines legal and economic basis of creation and activities of guarantee funds in the Kyrgyz Republic.

Chapter 1. General provisions

Article 1. The basic concepts and terms used in this Law

Guarantee fund - the legal entity created in the forms of business provided by this Law for the purpose of increase in availability to subjects of small and medium business of the bank loans aimed by them at business development, expansion - productions, acquisition and upgrade of fixed assets, implementation of new technologies, innovative activities and opening of the new companies, by provision of guarantees (guarantees).

Financial credit institutes - banks, the microfinancial organizations which based on the licenses of National Bank of the Kyrgyz Republic granted by it have the right to perform the banking activities which concluded or intending to sign the agreement on cooperation with guarantee fund and crediting subjects of small and medium business.

Guarantee capital - set of the financial resources consolidated by guarantee fund for ensuring obligation fulfillment of subjects of small and medium business before creditors by provision of guarantees (guarantees).

The obligations of the subject of small and medium business of the obligation of the subject of small and medium business which arose according to credit agreements and conforming to requirements of this Law.

Guarantee (guarantee) - the commitment letter of guarantee fund to be responsible for obligation fulfillment of subjects of small and medium business before financial credit institute according to the credit agreement, the agreement of leasing (further - the credit agreement).

Warranty case - the fact of non-execution by subjects of small and medium business of obligations according to the credit agreement.

Regulations of provision of guarantees (guarantees) - the document approved by authorized body of guarantee fund and regulating procedure and conditions of provision of guarantees (guarantees).

Subjects of small and medium business - the physical persons who are engaged in business activity without formation of legal entity, the commercial organizations and the companies determined according to the legislation of the Kyrgyz Republic.

The client - the subject of small and medium business who signed the credit, leasing agreement with financial credit institute from shares of warranty providing (guarantee) of guarantee fund.

Coefficient of the animator - coefficient of excess of amount of guarantees (guarantees) of guarantee fund which the financial credit institute, over the means of guarantee fund placed in the specified organization is ready to accept.

Warranty activities - the activities of guarantee funds directed to provision of guarantees (guarantees) to clients.

Participants of guarantee funds are founders, shareholders, unitholders and members of guarantee funds.

The recourse requirement - the right of guarantee fund to the requirement from the client of compensation of the amount paid to financial credit institute in obligation fulfillment under the agreement of guarantee (guarantee).

Article 2. Name of guarantee fund

The guarantee fund shall use only that name which is provided in articles of organization and to use in the name of the word "Guarantee fund", and in the short name - respectively abbreviation of "GF".

Article 3. Differentiation of responsibility of the Kyrgyz Republic and guarantee funds

Guarantee funds do not answer for obligations the Kyrgyz Republic, as well as the Kyrgyz Republic does not answer for obligations guarantee funds, except as specified, when the parties voluntarily assume such obligations.

Chapter 2. Forms of business of guarantee funds. Activities of guarantee funds

Article 4. Creation of guarantee fund

1. Guarantee funds can be created by physical persons and legal entities in case of observance of requirements of this Law.

2. Guarantee funds can be created in the form of joint-stock companies, limited liability companies, cooperatives and funds.

3. Guarantee funds create governing bodies depending on form of business, according to the legislation of the Kyrgyz Republic and according to constituent documents.

4. The legal entities who are not meeting the requirements provided by this Law having no right to be engaged in warranty activities.

Article 5. Associations of guarantee funds

1. For the purpose of coordination of the activities, protection and representation of common interests, accomplishment of joint guarantees and in other similar purposes guarantee funds can create associations or the unions.

2. Guarantee funds are forbidden to use associations or the unions for the purpose of establishment of the sizes of commission fee, fees or in other purposes directed to competition restriction, market monopolization and deterioration in access for subjects of small and medium business to credit resources.

Article 6. Branches and representations of guarantee funds

1. Branch of guarantee fund is its separate division, not being the legal entity, located out of the location of head guarantee fund, performing everything and/or part of transactions based on the provision approved by guarantee fund, and acting within the powers conferred to it by guarantee fund.

The branch has the authorized capital, balance, single with guarantee fund, and also the name which is completely matching the name of guarantee fund with addition of the word "branch".

2. Representation of guarantee fund is its separate division, protection and representation of interests of guarantee fund not being the legal entity, performing, making from his name transactions and other legal acts, except for issues of guarantees (guarantees).

3. Actions of branches and/or representations of guarantee funds are considered as actions of guarantee funds, and their created guarantee fund bears complete responsibility for actions of branches and/or representations.

Article 7. Independence of guarantee funds in the Kyrgyz Republic

1. Guarantee funds will independently organize and perform the activities within the competence provided to them by this Law and others

regulatory legal acts of the Kyrgyz Republic.

2. Intervention in any form in the solution of the questions connected with activities of the guarantee funds, except as specified, established by the legislation of the Kyrgyz Republic is forbidden to state bodies and local government bodies and their officials.

3. Amount of remuneration for services is independently established by guarantee fund according to the agreement signed with the client.

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