MICROCREDITING

in Terms of the National and Foreign Currencies Without Creation of the Legal Entity', 'On the Procedure for Microcrediting by the Commercial Banks of the Farmers' Households, Other Entities of the Small-Sized Entrepreneurship Implementing Their Activity in Terms of the National and Foreign Currencies With Creation of the Legal Entity', approved by the CBU, the National Bank is carrying out the microcrediting of individual entrepreneurs, dehkans' and farmers' households and other entities of small-sized business that are implementing their activity with or without creation of the legal entity.

The National Bank for FEA RUz has been staffed with a group of specialists rendering the consulting and practical assistance to entrepreneurs in preparation of all the required documents as well as carrying out the microcredit projects' examination and monitoring.

The subjects of microcrediting, in accordance with the Regulations of the Central Bank of RUz, are:

Micro-scale firm: an enterprise, irrespective of form of ownership, working with an average annual number of employees in productive area - no more than 10, in the sphere of trade, everyday services and other non-productive areas - no more than 5.
Small-sized enterprise: - an enterprise, irrespective of form of ownership, working with an average annual number of employees in industry - no more than 40, in construction, agriculture and other productive areas - no more than 20, in science, scientific service, retail trade and other non-productive areas - no more than 10.
Dehkans' household: - a family small-scale household implementing its activity with creation of a legal entity and carrying out the production and selling of the agricultural stuff on the basis of individual labor of the members of the family making use of the plot of land attached to the house extended to the head of the family for the life inheritance.
Farmers' household: - an independent economic entity enjoying the rights of a legal entity established on the basis of cooperation of the members of the farmer's household, carrying out the agricultural production process making use of the plots of land extended them on long lease.
Individual entrepreneurs' and dehkans' households implementing their activity without creation of a legal entity having no rights to hire the workers on the basis of property owned by the proprietary right as well as by virtue of any other law of property stipulating the possession and/or utilization of the property.

Microcredits are extended for the following purposes:

	purchase of mini- equipment
	development and expansion of the self-owned manufacturing, including purchase of seeds, seedlings, cattle, breeding stock, poultry, forage and mixed fodder, veterinary preparations, chemical remedies for protection of the plants, mineral fertilizers.
	first stage of processing of the primary products and row materials
	purchase of agricultural implements of labor, primary products, semi-prepared row materials, accessories;
	production of articles of the folk handicrafts and applied arts
	development of craftsmanship, organization of labor at home
	development of the consumer and everyday services rendered to the population
	development of the public health services
	development of the tourist industry
	organization of the small-scale production
	and other types of businesses related to production of consumer goods and services sector (works) not prohibited by the existing laws of the Republic of Uzbekistan

Microcredits in terms of foreign currency shall be extended for the above purposes only to make purchases on imports of the equipment, row materials and completing shares not produced in the Republic of Uzbekistan.

Microcredits shall be granted to the residents of the Republic of Uzbekistan only. Extension of the credits is effected at the place of keeping of the client's demand deposit account.

Microcredits are extended for the period not exceeding 3 years, at the same time this period depends on the recoupment of the crediting event. The size of the interest rate for utilization of the microcredits is determined under mutual agreement between the borrower and the bank on the basis of the credit agreement but within the limits of the refinancing rate officially set by the Central Bank.

Microcredits are not extended with the purposes of:

	repayment of the earlier obtained credits or any other debts
	tobacco-growing and alcohol drinks production
	implementation of the trade and intermediary activity
	acquisition of personal property not used for the purposes of production

CONDITIONS OF MICROCREDITING FOR LEGAL ENTITIES

Under the microcredits for farmers and any other economic subjects of the small-sized business implementing their activity with creation of a legal entity there are considered the credits in terms of foreign or national currency in amount not exceeding US$ 10,000 (ten thousand) in equivalent at the official rate of the Central Bank of the RU as of the date of the loan's extension.

It is admissible to grant the microcredits in cash for amount not exceeding 50% of the total amount of the microcredit facilities but only to the farmers to purchase livestock, poultry, seedlings and seeds from population provided they are repaid within a period not exceeding a year and a half (18 months).

Repayment of the microcredits extended in cash and interest payments on them should obligatory be effected in cash money.

For obtaining the microcredit facilities the subjects of small-sized business implementing their activity with creation of a legal entity shall submit the following documents to the bank:

	credit application indicating the amount of the requested credit
	business-plan with obligatory formulation of the purpose of utilization of the obtaining credit facilities and the credit repayment soundness
	accounting balance sheet (Form №1) for the latest fiscal period authenticated by the local (regional) body of the State Tax Service
	certificate on debit and credit indebtedness (Form №2 a ) as well as acts on checking the indebtedness exceeding 90 days
	report on the financial assessment (Form №2)

In order to prevent the credit risk the borrower shall furnish one or some of the following types of credit security to the bank:

	pledge of property and/or securities
	the banker's or the insurance company's guarantee
	guaranty issued by the third persons
	the insurance company's policy against the credit risk of non-repayment by the borrower
	guaranty issued by the gathering of inhabitants of makhallya, kishlak, aul

Kengash of the gathering of inhabitants of makhallya, kishlak, aul is bearing responsibility for the debtor's liabilities with its own property in accordance with the guaranty agreement

CONDITIONS OF MICROCREDITING FOR THE INDIVIDUAL ENTREPRENEURS AND DEHKANS' HOUSEHOLDS IMPLEMENTING THEIR ACTIVITY WITHOUT CREATION OF A LEGAL ENTITY

Under the microcredits for individual entrepreneurs and dehkans' households implementing their activity without creation of a legal entity there are considered the credits in terms of foreign or national currency in amount not exceeding US$ 5,000 (five thousand) in equivalent at the official rate of the Central Bank of the RUz as of the date of the loan's extension.

It is admissible to grant the microcredits in cash for amount not exceeding 50% of the total amount of the microcredit facilities provided they are repaid within a period not exceeding a year and a half (18 months).

Repayment of the microcredits extended in cash and interest payments on them should obligatory be effected in cash money through the cash department of the Bank.

For obtaining of the microcredit facilities the objects of small-sized business implementing their activity with creation of a legal entity shall submit the following documents to the bank:

	credit application
	business-plan with the obligatory indication of the purpose of utilization of the obtaining credit facilities and the credit repayment soundness

Besides that, an individual entrepreneur or a head of the dehkans' household personally presents the passport, one copy of which is placed into the credit file.

To avoid the credit risk, the Borrower shall furnish one or some of the following types of credit security to the bank:

	pledge of property and/or securities
	the banker's or the insurance company's guarantee
	guaranty issued by the third persons
	the insurance company's policy against the credit risk of non-payment by the borrower
	guaranty issued by the gathering of inhabitants of makhallya, kishlak, aul

Kengash of the gathering of the inhabitants of makhallya, kishlak, aul is bearing the responsibility for the debtor's liabilities with its own property in accordance with the guaranty agreement