Features of the Development of the Microfinance and Credit Monitoring System in Kyrgyzstan and Ukraine
Abstract
This research paper analyses the differences between banking and microfinance business models in the context of credit monitoring systems and funding sources. The purpose of this research was to show the differences in the context of these components of the activities of banks and microfinance organizations (MFOs) on the examples of Kyrgyzstan and Ukraine. The main research methods used were analysis, forecasting and abstraction. The study emphasized the importance of assessing the creditworthiness of clients, including assessment of their financial performance, credit history and other indicators. It was concluded that such analyses are crucial for financial institutions, as they enable them to assess the risk associated with lending and make informed decisions. The article also reviewed the regulatory framework of Kyrgyzstan in terms of credit monitoring of banks and MFOs, differences in their activities depending on the size of the loan, the financial capacity of the borrower, and the collateral assessment process. Also, an idea was formed about the process of financial monitoring in Ukraine, approaches applied in the country. In the process of comparing the two systems, a conclusion was made about their similarities (peculiarities of regulation, fundamental principles of creditworthiness assessment and risk management), but certain differences related to general approaches to monitoring were also noted. The study allows, based on the studied foreign experience, to increase the efficiency of credit monitoring of financial organizations’ clients. It also generally brings new knowledge for the study of the banking and microfinance sectors.
References
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[16] Horoshko, Olena-Ivanna, Andrii Horoshko, Stanislav Bilyuga, and Viktoriia Horoshko (2021). Theoretical and Methodological Bases of the Study of the Impact of Digital Economy on World Policy in 21 Century. Technological Forecasting and Social Change, 166: 120640.
[17] Jokipii, Terhi, and Pierre Monnin (2013). The Impact of Banking Sector Stability on the Real Economy. Journal of International Money and Finance, 32: 1-16. DOI: https://doi.org/10.1016/j.jimonfin.2012.02.008
[18] Kalenyuk, Iryna, Larysa Antoniuk, Oleg Kuklin, Liudmyla Tsymbal, and Olena Tsyrkun (2022). Modelling the Impact of Intellectualization on Economic Growth in Ukraine. Financial and Credit Activity: Problems of Theory and Practice, 4(45): 175-90.
[19] Karymshakov, Kamalbek, and Burulcha Sulaimanova 2019. Measuring the Impact and Financing of Infrastructure in the Kyrgyz Republic. Tokyo: Asian Development Bank Institute. Available at: https://www.adb.org/sites/default/files/publication/520321/adbi-wp988.pdf (accessed January 10, 2024).
[20] Khodakivska, Olga et al. (2022). Sustainable Development of Regions: Modeling the Management of Economic Security of Innovative Entrepreneurship. International Journal of Advanced and Applied Sciences, 9(3): 31-38.
[21] Kovalenko, Victoria et al. (2023). Credit and Investment Support for the Development of Ukraine’s Agricultural and Economy Sector. Scientific Horizons 26(5): 151-63. DOI:https://doi.org/10.48077/scihor5.2023.151
[22] Loi, Anna (2023). Identification of Investment Attraction Strategies to Increase the Economic Potential of a Trading Enterprise. Economics, Entrepreneurship, Management, 10(1): 8-16. DOI:https://doi.org/10.56318/eem2023.01.008
[23] Mabkhot, Hashed, and Hamid Abdulkhaleq Hasan Al-Wesabi (2022). Banks’ Financial Stability and Macroeconomic Key Factors in GCC Countries. Sustainability, 14(23): 15999. DOI:https://doi.org/10.3390/su142315999
[24] Makhazhanova, Ulzhan et al. (2022). The Evaluation of Creditworthiness of Trade and Enterprises of Service Using the Method Based on Fuzzy Logic. Applied Sciences (Switzerland), 12(22): 11515.
[25] Mehta, Kedar, Ekaterina Mingaleva, Wilfried Zörner, Nadira Degembaeva, and Ermek Baibagyshov. (2022). Comprehensive Analysis of the Energy Legislative Framework of Kyrgyzstan: Investigation to Develop a Roadmap of Kyrgyz Renewable Energy Sector. Cleaner Energy Systems, 2: 100013. DOI:https://doi.org/10.1016/j.cles.2022.100013
[26] Migwi, James M. (2013). Credit Monitoring and Recovery Strategies Adopted by Commercial Banks in Kenya. Nairobi: University of Nairobi. Available at: http://erepository.uonbi.ac.ke/handle/11295/59489
[27] Nikolaychuk, Tetyana (2022). The Main Prerequisites for Sectoral Financial and Credit Cooperation between Territorial Communities, Objects of the Nature Reserve Fund of Ukraine, and Environmental-Oriented Entrepreneurs: Theoretical Aspects. Scientific Bulletin of Mukachevo State University. Series ‘Economics’, 9(3): 9-19.
[28] Niyazbekova, Shakizada, Anastasia Zverkova, Natalia Sokolinskaya, and Seyit Kerimkhulle (2023). Features of the ‘Green’ Strategies for the Development of Banks. E3S Web of Conferences 402: 08029.
[29] Patino, Omar Alonso, and Laura Marcela Patino Gutierrez (2019). Financial Education and Inclusion: The Role of Banks. International Journal of Sustainable Entrepreneurship and Corporate Social Responsibility 4(1). Available at: https://www.igi-global.com/article/financial-education-and-inclusion/228991
[30] Poyda-Nosyk, Nina, and Noemi Markush (2023). Comparative Characteristics of Accounting Models. Scientific Bulletin of Mukachevo State University. Series ‘Economics’, 10(2): 21-30. DOI:https://doi.org/10.52566/msu-econ2.2023.21
[31] Toktosunova, Colpon et al. (2021). Problems of the Growth of the External Public Debt of the Kyrgyz Republic. Studies of Applied Economic, 39(5): 1-18. DOI: https://doi.org/10.25115/eea.v39i5.5245
[32] Trusova, Natalia V. et al. (2021). Managing the Intellectual Potential in the Business-Network of Innovative Digital Technologies. Estudios de Economia Aplicada, 39(5): 1-15.
[33] Trusova, Natalia V., Serhii V. Karman, Maksym A. Tereshchenko, Yurii O. Prus (2018). Debt Burden of the Financial System of Ukraine and Countries of the Eurozone: Policy of Regulating of the Risks. Espacios, 39(39). Available at: https://www.revistaespacios.com/a18v39n39/a18v39n39p30.pdf
[34] Vereshchahina, Kateryna (2023). Problems of Legal Regulation of Bankruptcy. Social and Legal Studios, 6(3): 201-208. DOI: https://doi.org/10.32518/sals3.2023.201
[35] Vovchenko, Oksana (2021). Development of the Banks’ Risk Management System under Conditions of Uncertainty. Economics of Development, 20(4): 8-15.
[36] Law of the Kyrgyz Republic No. 21 ‘On the Payment System of the Kyrgyz Republic’. 2015. Available at: http://cbd.minjust.gov.kg/act/view/ru-ru/205425
[37] Law of the Kyrgyz Republic No. 249 ‘On the Authorised State Body in the Sphere of Supervision and Regulation of the Financial Market’. 2009. Available at: http://cbd.minjust.gov.kg/act/view/ru-ru/203198
[38] Law of the Kyrgyz Republic No. 93 ‘On Banks and Banking Activities’. 2022. Available at: http://cbd.minjust.gov.kg/act/view/ru-ru/112428
[39] Law of Ukraine No. 25 ‘On Prevention and Counteraction of Legalization (Laundering) of Criminal Proceeds, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction’. 2020. Available at: https://zakon.rada.gov.ua/laws/show/361-20#Text
[40] Regulation No. 52/4 ‘On the Minimum Requirements for Credit Risk Management in Commercial Banks and Other Financial and Credit Institutions Licensed by the National Bank of the Kyrgyz Republic’. 2010. Available at: http://cbd.minjust.gov.kg/act/view/ru-ru/302354/150?cl=ru-ru
[2] Akbulaev, Nurkhodzha, and Basti Aliyeva (2020). Gender and Economic Growth: Is There a Correlation? The Example of Kyrgyzstan. Cogent Economics and Finance, 8(1): 1758007. DOI:https://doi.org/10.1080/23322039.2020.1758007
[3] Akomea-Frimpong, Isaac, David Adeabah, Deborah Ofosu, and Emmanuel Jr. Tenakwah (2022). A Review of Studies on Green Finance of Banks, Research Gaps and Future Directions. Journal of Sustainable Finance and Investment, 12(4): 1241-64. DOI: https://doi.org/10.1080/20430795.2020.1870202
[4] Al-Harbi, Ahmad (2019). The Determinants of Conventional Banks Profitability in Developing and Underdeveloped OIC Countries. Journal of Economics, Finance and Administrative Science, 24(47): 4-28. DOI: https://doi.org/10.1108/JEFAS-05-2018-0043
[5] Aseinov, Dastan, and Kamalbek Karymshakov (2018). Development of the Banking System in Kyrgyzstan: An Historical Review and Current Challenges. Sosyoekonomi, 26(38): 71-86. DOI:https://doi.org/10.17233/sosyoekonomi.2018.04.05
[6] Bhattacharyay, Biswanath, and Gernot Nerb (2002). Leading Indicators for Monitoring the Stability of Assets and Financial Markets in Asia and the Pacific. Asia-Pacific Development Journal, 9(2): 17-50. Available at: https://www.unescap.org/sites/default/files/2%20Bhattacharyay%20and%20Nerb.pdf
[7] Branzoli, Nicola, Edoardo Rainone, and Ilaria Supino (2023). The Role of Banks’ Technology Adoption in Credit Markets during the Pandemic. DOI: http://dx.doi.org/10.2139/ssrn.4463978
[8] Buallay, Amina, and Jasim Al-Ajmi (2020). The Role of Audit Committee Attributes in Corporate Sustainability Reporting: Evidence from Banks in the Gulf Cooperation Council. Journal of Applied Accounting Research 21(2): 249-64. DOI: https://doi.org/10.1108/JAAR-06-2018-0085
[9] Cheremisina, Svitlana, and Iryna Tomashuk (2023). Regional Aspect of the Efficiency of Lending to the Agricultural Sector of the Ukrainian Economy. Ekonomika APK, 30(5): 46-58. DOI:https://doi.org/10.32317/2221-1055.202305046
[10] Cincinelli, Peter, and Domenico Piatti (2021). How Inefficient is an Inefficient Credit Process? An Analysis of the Italian Banking System. Journal of Risk Finance, 22(3/4): 209-39. DOI: .1108/JRF-08-2020-0184
[11] Cotoc, Corina-Cristina, Maria Nitu, Mircea Constantin Scheau, and Adeline-Cristina Cozma (2021). Efficiency of Money Laundering Countermeasures: Case Studies from European Union Member States. Risks, 9(6): 120. DOI: https://doi.org/10.3390/risks9060120
[12] Cvetkoska, Violeta, Katerina Fotova Ciković, and Marija Tasheva (2021). Efficiency of Commercial Banking in Developing Countries. Mathematics, 9(14): 1597. DOI: https://doi.org/10.3390/math9141597
[13] D’Orazio, Paola, and Lilit Popoyan (2022). Realising Central Banks’ Climate Ambitions through Financial Stability Mandates. Intereconomics, 57: 103-11. DOI: https://doi.org/10.1007/s10272-022-1039-4
[14] Drobyazko, Svetlana et al. (2019). Model for Forming of Optimal Credit Portfolio of Commercial Bank. Journal of Management Information and Decision Sciences, 22(4): 501-6.
[15] Furmanchuk, Oksana (2023). The Role of State Finance Audit in the System of Accounting and Analytical Support of the State Funds Management System. Economics of Development, 22(4): 34-42. DOI:https://doi.org/10.57111/econ/4.2023.34
[16] Horoshko, Olena-Ivanna, Andrii Horoshko, Stanislav Bilyuga, and Viktoriia Horoshko (2021). Theoretical and Methodological Bases of the Study of the Impact of Digital Economy on World Policy in 21 Century. Technological Forecasting and Social Change, 166: 120640.
[17] Jokipii, Terhi, and Pierre Monnin (2013). The Impact of Banking Sector Stability on the Real Economy. Journal of International Money and Finance, 32: 1-16. DOI: https://doi.org/10.1016/j.jimonfin.2012.02.008
[18] Kalenyuk, Iryna, Larysa Antoniuk, Oleg Kuklin, Liudmyla Tsymbal, and Olena Tsyrkun (2022). Modelling the Impact of Intellectualization on Economic Growth in Ukraine. Financial and Credit Activity: Problems of Theory and Practice, 4(45): 175-90.
[19] Karymshakov, Kamalbek, and Burulcha Sulaimanova 2019. Measuring the Impact and Financing of Infrastructure in the Kyrgyz Republic. Tokyo: Asian Development Bank Institute. Available at: https://www.adb.org/sites/default/files/publication/520321/adbi-wp988.pdf (accessed January 10, 2024).
[20] Khodakivska, Olga et al. (2022). Sustainable Development of Regions: Modeling the Management of Economic Security of Innovative Entrepreneurship. International Journal of Advanced and Applied Sciences, 9(3): 31-38.
[21] Kovalenko, Victoria et al. (2023). Credit and Investment Support for the Development of Ukraine’s Agricultural and Economy Sector. Scientific Horizons 26(5): 151-63. DOI:https://doi.org/10.48077/scihor5.2023.151
[22] Loi, Anna (2023). Identification of Investment Attraction Strategies to Increase the Economic Potential of a Trading Enterprise. Economics, Entrepreneurship, Management, 10(1): 8-16. DOI:https://doi.org/10.56318/eem2023.01.008
[23] Mabkhot, Hashed, and Hamid Abdulkhaleq Hasan Al-Wesabi (2022). Banks’ Financial Stability and Macroeconomic Key Factors in GCC Countries. Sustainability, 14(23): 15999. DOI:https://doi.org/10.3390/su142315999
[24] Makhazhanova, Ulzhan et al. (2022). The Evaluation of Creditworthiness of Trade and Enterprises of Service Using the Method Based on Fuzzy Logic. Applied Sciences (Switzerland), 12(22): 11515.
[25] Mehta, Kedar, Ekaterina Mingaleva, Wilfried Zörner, Nadira Degembaeva, and Ermek Baibagyshov. (2022). Comprehensive Analysis of the Energy Legislative Framework of Kyrgyzstan: Investigation to Develop a Roadmap of Kyrgyz Renewable Energy Sector. Cleaner Energy Systems, 2: 100013. DOI:https://doi.org/10.1016/j.cles.2022.100013
[26] Migwi, James M. (2013). Credit Monitoring and Recovery Strategies Adopted by Commercial Banks in Kenya. Nairobi: University of Nairobi. Available at: http://erepository.uonbi.ac.ke/handle/11295/59489
[27] Nikolaychuk, Tetyana (2022). The Main Prerequisites for Sectoral Financial and Credit Cooperation between Territorial Communities, Objects of the Nature Reserve Fund of Ukraine, and Environmental-Oriented Entrepreneurs: Theoretical Aspects. Scientific Bulletin of Mukachevo State University. Series ‘Economics’, 9(3): 9-19.
[28] Niyazbekova, Shakizada, Anastasia Zverkova, Natalia Sokolinskaya, and Seyit Kerimkhulle (2023). Features of the ‘Green’ Strategies for the Development of Banks. E3S Web of Conferences 402: 08029.
[29] Patino, Omar Alonso, and Laura Marcela Patino Gutierrez (2019). Financial Education and Inclusion: The Role of Banks. International Journal of Sustainable Entrepreneurship and Corporate Social Responsibility 4(1). Available at: https://www.igi-global.com/article/financial-education-and-inclusion/228991
[30] Poyda-Nosyk, Nina, and Noemi Markush (2023). Comparative Characteristics of Accounting Models. Scientific Bulletin of Mukachevo State University. Series ‘Economics’, 10(2): 21-30. DOI:https://doi.org/10.52566/msu-econ2.2023.21
[31] Toktosunova, Colpon et al. (2021). Problems of the Growth of the External Public Debt of the Kyrgyz Republic. Studies of Applied Economic, 39(5): 1-18. DOI: https://doi.org/10.25115/eea.v39i5.5245
[32] Trusova, Natalia V. et al. (2021). Managing the Intellectual Potential in the Business-Network of Innovative Digital Technologies. Estudios de Economia Aplicada, 39(5): 1-15.
[33] Trusova, Natalia V., Serhii V. Karman, Maksym A. Tereshchenko, Yurii O. Prus (2018). Debt Burden of the Financial System of Ukraine and Countries of the Eurozone: Policy of Regulating of the Risks. Espacios, 39(39). Available at: https://www.revistaespacios.com/a18v39n39/a18v39n39p30.pdf
[34] Vereshchahina, Kateryna (2023). Problems of Legal Regulation of Bankruptcy. Social and Legal Studios, 6(3): 201-208. DOI: https://doi.org/10.32518/sals3.2023.201
[35] Vovchenko, Oksana (2021). Development of the Banks’ Risk Management System under Conditions of Uncertainty. Economics of Development, 20(4): 8-15.
[36] Law of the Kyrgyz Republic No. 21 ‘On the Payment System of the Kyrgyz Republic’. 2015. Available at: http://cbd.minjust.gov.kg/act/view/ru-ru/205425
[37] Law of the Kyrgyz Republic No. 249 ‘On the Authorised State Body in the Sphere of Supervision and Regulation of the Financial Market’. 2009. Available at: http://cbd.minjust.gov.kg/act/view/ru-ru/203198
[38] Law of the Kyrgyz Republic No. 93 ‘On Banks and Banking Activities’. 2022. Available at: http://cbd.minjust.gov.kg/act/view/ru-ru/112428
[39] Law of Ukraine No. 25 ‘On Prevention and Counteraction of Legalization (Laundering) of Criminal Proceeds, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction’. 2020. Available at: https://zakon.rada.gov.ua/laws/show/361-20#Text
[40] Regulation No. 52/4 ‘On the Minimum Requirements for Credit Risk Management in Commercial Banks and Other Financial and Credit Institutions Licensed by the National Bank of the Kyrgyz Republic’. 2010. Available at: http://cbd.minjust.gov.kg/act/view/ru-ru/302354/150?cl=ru-ru
Published
2024-06-28
How to Cite
MURZAIBRAIM, Renat et al.
Features of the Development of the Microfinance and Credit Monitoring System in Kyrgyzstan and Ukraine.
Theoretical and Practical Research in Economic Fields, [S.l.], v. 15, n. 2, p. 196-206, june 2024.
ISSN 2068-7710.
Available at: <https://journals.aserspublishing.eu/tpref/article/view/8460>. Date accessed: 27 dec. 2024.
doi: https://doi.org/10.14505/tpref.v15.2(30).04.
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