Document Type

Case Study

Case Series

Broad-Based Asset Management Programs

JEL Codes

G01, G28


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.

Date Revised