Kyrgyz Republic's State Service for Regulation and Supervision of Financial Markets reports tighter pawnshop rules and enforcement including an interest-rate cap and phased capital hikes

Kyrgyz Republic's State Service for Regulation and Supervision of Financial Markets published an overview of measures used to reshape the pawnshop sector, combining new consumer-protection rules with enhanced supervision and enforcement actions. Key changes include a ceiling for the annual effective interest rate (AYS) set as the weighted average nominal rate of the NBKR plus 12%, which the authority says has limited rates to around 30% per annum in practice. The framework also requires pawnshops to provide borrowers with clear pre-contract information on loan terms and prohibits hidden payments, while restricting the transfer of loan and borrower information to credit bureaus. A Cabinet of Ministers resolution further bans unilateral contract changes that worsen borrower rights and limits credit-bureau reporting to cases where the loan amount exceeds KGS 200,000. The minimum authorised capital is being increased on a phased schedule, with a KGS 3,000,000 floor in force from 1 January 2025, rising to KGS 7,000,000 from 1 July 2026, KGS 14,000,000 from 1 July 2027, and KGS 20,000,000 from 1 July 2028. Since 2021, supervision has included 285 inspections, resulting in 111 licence revocations, 11 suspensions, and 290 fines totalling KGS 8,414,000, alongside expanded risk-based remote and on-site supervisory tools focused on hidden commissions, collateral retention, and collateral-sale practices.