In an interview with PrimeMinister.kz, Deputy Chair of the Board of the Agency for the Regulation and Development of the Financial Market Nurlan Abdrakhmanov spoke about regulation of the microcredit market organizations. 

According to Abdrakhmanov, until 2019, Kazakhstanis actively used the services of microcredit companies. In this regard, certain problems have accumulated in this sector. 

“People often suffered from the fact that such organizations set high interest rates, introduced penalties and fines. Also in the past year, we observed some cases of fraud. In this regard, in 2019, a law was adopted that introduced, at the beginning of this year, the regulation of microcredit companies, as well as their mandatory registration with the Agency by July 1, 2020,’’ Abdrakhmanov informed. 

But due to the quarantine, the activities of many microcredit companies were limited and suspended, not all of them had the opportunity to undergo registration, so the registration period was extended until Sep. 1. 

As of the current moment, about 1,104 microcredit companies have already been registered, including 562 pawnshops, 380 microfinance companies and about 182 credit partnerships. 

The Agency will conduct accounting registration and maintain a register of organizations engaged in microfinance activities, approve prudential standards and other mandatory norms and limits, as well as methods for their calculation, approve the list of documents required for obtaining a microcredit, as well as the procedure for maintaining a credit dossier. The Agency also approves, in agreement with the Ministry of Internal Affairs, the procedure for organizing the activities of pawnshops, including issues of storing things in a pawnshop, establishing requirements for ensuring the safety and technical strength of pawnshop premises, measures to counter the circulation of illegally obtained things in pawnshops. 

The regulator will develop and approve, in agreement with the state body in charge of ensuring tax revenues and other obligatory payments to the budget, rules for the classification of assets and contingent liabilities on provided microcredits and the creation of provisions (reserves) against them. The Agency's competence includes checking the activities of pawnshops, monitoring compliance by pawnshops with the requirements provided for by the legislation of the Republic of Kazakhstan on combating the legalization (laundering) of criminally obtained incomes and financing of terrorism, filing a lawsuit for forced reorganization or liquidation of pawnshops that did not pass after 01.07. year registration with the authorized body. 

In addition, on behalf of the Head of State, compulsory licensing of all microcredit companies will be introduced starting next year. The agency has developed appropriate amendments to the legislation. They provide that from Jan. 1, 2021, only an organization that has received the Agency's license can issue microcredits.