ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of June 15, 2016 No. 319

About the Program of increase in financial literacy of the population of the Kyrgyz Republic for 2016-2020

For the purpose of increase in level of financial literacy of the population, change of financial behavior of citizens and increase in level of their welfare, according to articles 10 and 17 of the constitutional Law of the Kyrgyz Republic "About the Government of the Kyrgyz Republic" the Government of the Kyrgyz Republic decides:

1. Approve:

- The program of increase in financial literacy of the population of the Kyrgyz Republic for 2016-2020 according to appendix 1;

- The actions plan on realization of the first stage of the Program of increase in financial literacy of the population of the Kyrgyz Republic for 2016-2020 according to appendix 2;

- The actions plan on realization of the second stage of the Program of increase in financial literacy of the population of the Kyrgyz Republic for 2016-2020 according to appendix 3;

- The actions plan on realization of the third stage of the Program of increase in financial literacy of the population of the Kyrgyz Republic for 2016-2020 according to appendix 4. 

2. To provide to the ministries, the state committees, other executive bodies involved in implementation of the above-stated actions plans in Government office of the Kyrgyz Republic information on the course of accomplishment of actions for implementation of the above-stated actions plans no later than the 25th following reporting half-year.

3. Recommend to National Bank of the Kyrgyz Republic to provide in Government office of the Kyrgyz Republic information on the course of accomplishment of actions for implementation of the above-stated actions plans no later than the 25th following reporting half-year.

4. To impose control of execution of this resolution on department of finance and credit policy of Government office of the Kyrgyz Republic.

5. This resolution becomes effective after seven days from the date of official publication.

Appendix 1

The program of increase in financial literacy of the population of the Kyrgyz Republic for 2016 - 2020

1. Overall assessment of the current situation

During last fifth anniversary development of the Kyrgyz Republic took place in conditions of overcoming effects of the global financial crisis of 2008-2009, as a result of the social and economic changes which took place in 2010.

In such situation future development of the country, including the needs for mobilization and rational use of human, natural, financial and other provisions and resources for exit to steady line items in development, was determined at the nation-wide level "National sustainability strategy of the Kyrgyz Republic for 2013 - 2017" (further - Strategy) approved by the Presidential decree of the Kyrgyz Republic of January 21, 2013 No. 11. The model of sustainable development provided by Strategy determines strategic reference points and priorities, combining efforts of all state bodies, private sector and civil society concerning future development of Kyrgyzstan.

One of the directions of Strategy are development of financial banking sector, forming of stable and effective system of financial credit institutions (further - FKO), capable to effectively mobilize financial resources and to satisfy requirements of the population and entrepreneurs for the long-term and available loans.

In the conditions of the extending level of financial intermediation increase in number of consumers of such financial services as payment and settlement transactions and payments, deposits of commercial banks, different credit products of the banking and microfinancial sector is noted. However the level of awareness of consumers of services does not correspond to complexity of credit and other financial products.

Job analysis of National Bank of the Kyrgyz Republic (further - National Bank) with addresses of citizens revealed need of the full-scale and approved approach to increase in financial literacy of the population.

The program of increase in financial literacy of the population of the Kyrgyz Republic for 2016-2020 (further - the Program) is directed to strategy implementation and considers key priorities of economic policy of the Government of the Kyrgyz Republic, the interested ministries and departments, National Bank, members of the financial market, business associations and other interested structures of its further realization.

In the Program the basic principles and achievements of the commonly accepted international policy and practice differentiating responsibility of the state and citizens for effects of the finance solutions made by them are considered. The program does not replace, and supplements proper measures of regulation of the financial market of the Kyrgyz Republic, and also measure for increase in financial literacy of the population.

Financial literacy is capability of the person to receive, understand and estimate information necessary for use of financial knowledge in practice, realizing at the same time possible financial effects. Increase in financial literacy is amendment to proper protection of consumer interests. Level of financial literacy increases as a result of financial education - process within which citizens improve the understanding of financial products and services, acquiring skills of financial behavior.

Financial literacy promotes financial wellbeing of the person, and also influences the level of financial involvement (inclusivity), development of the fair and effective financial institutions offering suitable and acceptable financial services, system of consumer protection which provides to users of financial services protection against financial fraud.

The incomplete or insufficient understanding of the rights and responsibility of borrowers can lead to problem of perecreditovannost of people and, as a result, to decline in the ability of the banking and microfinancial sector to perform further financing of real production sector.

In 2015 the amount of credit portfolio of commercial banks made 93, 9 billion som (surplus since the beginning of year - % 19,3), amount of credit portfolio of the microfinancial sector for the same period constituted 23, 3 billion som (decrease since the beginning of year - 34%).

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