In the mid-1990s, the largest state-owned banks in the Kyrgyz Republic faced insolvency and a concomitant large stock of nonperforming loans, a problem stemming from the former Soviet Union’s policy of directed credit to loss-making institutions. The government established DEBRA, a debt resolution agency and asset management company. DEBRA could liquidate or restructure a bank and take on its assets in the process, or just take on a bank’s nonperforming assets. DEBRA received the assets in exchange for government securities. Staff attempted to resolve the debt by collection, restructuring, writing off, or liquidating the assets. Officials initially established DEBRA with a three-year mandate, but the entity eventually evolved into a semipermanent fixture in the country’s financial system that still operated as of April 2021. By April 1999, the end of its initial mandate, DEBRA’s portfolio of bad loans totaled Som 1,573 million (USD $42 million), 73% of which were unresolved.
Nunn, Sharon M.
"Kyrgyz Republic’s Debt Resolution Agency, DEBRA,"
The Journal of Financial Crises: Vol. 3
Iss. 2, 330-340.
Available at: https://elischolar.library.yale.edu/journal-of-financial-crises/vol3/iss2/17
Economic History Commons, Economic Policy Commons, Finance and Financial Management Commons, Macroeconomics Commons, Policy Design, Analysis, and Evaluation Commons, Policy History, Theory, and Methods Commons, Public Administration Commons