Turkmenistan has approved a new Procedure for providing preferential loans to agricultural producers. Under the document, loans will be issued at an annual interest rate of 1% for a term of up to 10 years. This was reported by Turkmenportal.

The new Procedure was approved by Order No. 280 of the Chairman of the Central Bank of Turkmenistan dated 24 August 2026. On 16 September, the document was registered with the Ministry of Justice of Turkmenistan under No. 1968. It was developed to implement Presidential Resolution No. 1822 of 11 May 2026 on financial support for agricultural producers. The new rules replace the previous Procedure approved by the Central Bank in 2018.

Who is eligible for preferential loans?

Preferential loans will be available to dayhan associations, dayhan farms, agricultural joint-stock companies, relevant research institutes, landowners, land users, and tenants. Individual entrepreneurs engaged in agricultural production and non-state legal entities registered in Turkmenistan will also be eligible.

The loans will be provided by authorized credit institutions in Turkmenistan. Credit institutions operating in the country whose capital is 100% foreign-owned are excluded from this Procedure. Lending may be carried out in national or foreign currency.

What can the loan funds be used for?

Preferential loans may be used to purchase agricultural machinery and equipment, excavators, bulldozers, water-saving machinery, various types of equipment, irrigation pipelines, and transformers.

Loan funds may also be allocated to investment projects involving livestock farming and poultry production, the production and processing of agricultural products, payments for relevant services, and the purchase of fixed assets and property.

The use of loan funds to cover losses, pay fines, manufacture tobacco products or alcoholic beverages, or provide working capital for trading and hairdressing businesses is prohibited.

Main lending conditions

Under the new Procedure, the annual interest rate is set at 1%, and the loan term may extend to 10 years. Loans obtained to purchase machinery and equipment must be repaid in equal annual instalments.

Borrowers must finance at least 15% of the total investment project cost from their own funds. A grace period is предусмотрed for investment projects, and loan funds may also be disbursed in stages.

The Central Bank of Turkmenistan enters into agreements with commercial banks to provide credit funds at an annual interest rate of 0.5%.

Loan security and required documents

For loans intended to purchase machinery, the machinery itself may be accepted as collateral for up to 70% of its value. The borrower’s future income is taken into account for the remaining portion. For eligible categories of borrowers, collateral, a bank guarantee, or a third-party guarantee may also be accepted as security. For loans to dayhan associations, income derived from all their types of activities is considered security.

Applicants must submit an application to the bank, registration documents, a business plan, documents relating to the land plot, and income information for the previous two or three years, depending on the borrower’s category.

The bank must decide whether to grant or refuse the loan within 15 working days from the date the application is registered. If the application is rejected, the applicant must be notified of the reasons in writing.

Monitoring the use of loan funds

Loan funds are transferred electronically to a separate credit account held by the borrower. Payments can be made from this account on the basis of payment orders. Foreign currency may also be purchased to make payments to foreign counterparties under foreign trade contracts.

Banks are required to conduct on-site inspections to verify that loan funds are used for their intended purposes. They must also submit relevant reports to the Central Bank of Turkmenistan every month, including lists of borrowers.

If the funds are found to have been used for purposes other than those specified, the bank may recover the relevant amount early from the borrower’s accounts. If loan payments are overdue, the bank is also entitled to terminate the agreement and demand early repayment of the outstanding balance.

The main objectives of the new Procedure include increasing crop yields, bringing unused land into cultivation, expanding the production of import-substituting goods and exports, creating new jobs, and increasing the income of agricultural producers.