Debt in Turkmenistan

The Civil Code in force since 1 January 2026 regulates loans and related obligations, subject to transition rules for older relationships. A loan normally requires the borrower to return money or goods of the same kind. A bank loan is generally documented in writing and the contract states the interest rate, fees, repayment dates, liability for late payment and possible termination. Variable bank interest can be linked to the Central Bank of Turkmenistan discount rate. For a late bank payment, statutory interest is the Central Bank discount rate plus three percentage points; interest on late-payment interest cannot be compounded. An open-ended loan can generally be terminated with three months' notice, and a debt transfer requires the creditor's consent. Banks and other credit institutions provide formal access to credit. Lenders commonly assess Turkmenistan citizenship, regular employment or income, a salary card, credit history, a stated purpose, one or two guarantors, insurance or collateral. Halkbank lists consumer loans up to TMT 50,000 for up to five years at 7% with one guarantor or insurance, and loans up to TMT 100,000 with two guarantors, collateral or insurance. Its published products also include mortgages at 1% for up to 30 years through the Ashgabat branch, student credit at 5% for up to one year and newlywed credit at 1% up to TMT 20,000 for up to three years. The Turkmenistan Foreign Economic State Bank lists consumer credit at 7% for two to three years and agricultural or livestock microcredit up to TMT 30,000 at 10% for up to three years for eligible land or plot owners. Product availability, approval and current charges depend on the lender and should be checked in the current tariff and contract. Halkbank has also reported the Sanly karz online application, which checks passport, salary-card and credit-history data and normally requires one bank visit. Loan costs can include product-specific service charges. A Halkbank page lists a 10 TMT service fee plus 15% VAT, while a 2025 tariff lists charges of 200 TMT for changing a contract, security or guarantor, 400 TMT for mortgage formalisation and 5,000 TMT for transferring mortgage debt or property. These amounts are not a universal tariff for every lender. A borrower who expects missed payments should contact the bank early, request a written restructuring and reconcile the account. Deferment or a new payment plan takes effect only when the creditor agrees. No general consumer moratorium has been evidenced. A creditor may claim contractual or statutory interest and damages after default. Depending on the contract and applicable law, the creditor may accelerate the debt and enforce a pledge, mortgage, bank guarantee or surety. Banks are required to take legal collection measures; after unsuccessful recovery, a bank may be able to write a claim off against reserves under the applicable rules. A court judgment or another enforceable title can be transferred to the Judicial Enforcement Administration under the Supreme Court and its territorial departments. The debtor normally receives five days for voluntary payment after enforcement opens, except where immediate execution applies. Later measures can include seizure of bank accounts, withholding from income, an inventory and attachment of assets, auction or sale, and seizure of receivables. The debtor and creditor can inspect the file, submit motions and challenge an executor's actions in court. Search, valuation, storage, sale and banking or postal costs can be added, and the executor receives a 5% premium from collected sums. From the opening of enforcement, statutory late-payment penalties no longer accrue. Certain maternity, childcare, pension, scholarship and social payments and income categories are protected, subject to statutory exceptions such as alimony and compensation for health or death. A failed enforcement attempt does not automatically cancel the debt. If no attachable assets remain after the available measures, the title may return to the creditor. Secured creditors generally receive priority, and a mortgage can cover all or part of a dwelling subject to the amount owed, registration and court safeguards. Licensed advocates can provide advice, complaints and representation in civil or arbitration matters. Free legal aid is expressly available for areas such as alimony, health or death damages and some vulnerable groups; authorities or courts may reduce or waive fees in other cases based on means. No dedicated public debt-counselling body has been evidenced. Business insolvency differs from ordinary salaried consumer debt. The Bankruptcy Act mainly covers legal persons, entrepreneurs and people conducting economic activity. An economic court at the debtor's registered seat may become involved when a debtor refuses or cannot pay, remains unpaid for two months after a formal creditor demand or has liabilities exceeding assets. The creditor's registered demand normally gives a two-month deadline and warns of bankruptcy proceedings. Possible routes include out-of-court negotiation, deferment agreed with all or at least two-thirds of creditors, voluntary liquidation, reorganisation, administrative management, financial rehabilitation, compulsory liquidation or a court-approved settlement. A creditor meeting generally needs at least 50% of unsecured claims for a quorum, and settlement approval requires at least two-thirds of claim value. Secured claims are treated outside the ordinary distribution queue. Bankruptcy rules for an individual entrepreneur can reach attachable assets and rank claims for life or health damages and alimony, employee claims for up to three months, secured creditors, budget and social payments, and other creditors. These business procedures do not establish a general fresh-start discharge for ordinary consumer debt. Public debt follows a separate budget framework. The Budget Code defines state debt as disbursed and unpaid state loans and related obligations, including domestic and external debt. The Government, the Central Bank of Turkmenistan and local executive authorities can be debtors. State debt may be short term up to one year, medium term from one to five years or long term above five years. The Ministry of Finance and Economy registers and monitors it, analyses limits, plans repayment and servicing, and handles refinancing or restructuring. Central-budget debt service comes from the central budget, while local debt service comes from local budgets; local debt-service expenditure is limited to 10% of local-budget revenue. A government guarantee requires a presidential resolution and a budget limit. The guarantee fee is 0.2% for state-controlled legal entities and 2% for other legal entities. The government pays after default only when due and within available budget funds, then has recourse against the borrower. Restructuring requires agreement between lender and borrower together with a government decision. IMF estimates put total public debt at 4.1% of GDP in 2024, 3.1% in 2025 and 2.9% projected for 2026; these figures include domestic government debt, external public debt and publicly guaranteed debt and carry data uncertainty.