Loan restrictions imposed in Kazakhstan, affecting potential borrowers facing certain sanctions
In Kazakhstan, a Shift Towards Tighter Lending Regulations
There's been a buzz surrounding potential restrictions on lending in Kazakhstan, but the details are yet to be fully disclosed. At a recent Senate briefing, Olzhas Kizatov, Deputy Chairman of the Agency for Regulation and Development of the Financial Market, implied that banks may soon be barred from providing loans to certain individuals with special ties to the bank.
To tackle potential risks, base banks could be prohibited from offering loans and other credit products to non-residents and lending to individuals with special ties to the bank. As Kizatov stated, the legislation defines who are affiliated with the management of second-tier banks, and banks submit quarterly reports indicating who is affiliated.
While this announcement has sparked curious conversations, it's essential to clarify that the exact plans are yet to be officially unveiled. However, in recent times, the focus seems to be on tightening consumer lending standards.
Beyond the Banking Ties
As it stands, the National Bank enforces a strict 50% debt-to-income ratio limit for most loan types. Previously, there were exemptions for collateralized loans or high-income borrowers, but these have been eliminated. Moreover, indirect income indicators like utility payments and property ownership can no longer be used to assess borrowers’ repayment capacity. These changes aim to root out risky lending practices and protect consumers, rather than targeting specific individuals.
In fact, the recent reforms in Kazakhstan prioritize macroprudential stability over individualized bans. They don't mention any specific restrictions for individuals connected to financial institutions. It's worth noting that the April 2025 reforms have addressed state funding for foreign athletes but not loan eligibility. The European Bank for Reconstruction and Development’s planned $1 billion investment in infrastructure and renewable energy underscores broader financial priorities in the country.
So, while the specifics of the potential banking ties restrictions are still unclear, the broader picture shows a move towards tighter general lending rules. Stay tuned for more updates as Kazakhstan continues to shape its financial landscape.
- Olzhas Kizatov, Deputy Chairman of the Agency for Regulation and Development of the Financial Market in Kazakhstan, defines individuals affiliated with the management of second-tier banks.
- Banks in Kazakhstan report affiliates quarterly, as stated by Olzhas Kizatov, following restrictions on lending to certain individuals with special ties to the bank.
- Kizatov's statement highlights the tightening of consumer lending standards in Kazakhstan, such as the 50% debt-to-income ratio limit for most loans.
- The recent reforms prioritizing macroprudential stability in Kazakhstan focus on general lending rules rather than imposing specific restrictions on individuals connected to financial institutions.
