Over a thousand fraudulent loans granted in Kazakhstan
The Slash in Microloans Issue in 2021: A Fourfold Decrease
Chairperson Madina Abylkassymova of Kazakhstan's Financial Market Regulation and Development Agency has discussed the surveillance of microloans dispensed by microfinance organizations to the public, as reported by "Kazinform."
Here's the lowdown: in 2020, the Kazakhstan Ministry of Internal Affairs recorded 3,000 cases of online scams, encompassing not just financial organizations but also illegal financial pyramids, fraudulent investment groups, and other fraudulent schemes that involved ripping off the populace. Last year, the agency unearthed 956 instances of fake microloans totaling a whopping 77.9 million tenge, accounting for a mere 0.05% of all online microloans floating around. But hey, every penny counts, right?
Moving on to 2021, the numbers have taken a significant nosedive. In just the first fourth months, the number of phony microloans decreased a staggering 3.6 times—all the way down to 94 cases valued at 10.6 million tenge.
The Kazakhstan Ministry of Internal Affairs (MVD) has noted that 96% of these cases were criminal in nature, involving identity theft, lost or stolen ID documents, and less-than-rigorous verification methods. The MVD pointed out that such methods were most commonly observed when microloans were issued via electronic platforms.
To cut down on microloan scams, the agency has taken several proactive steps:
- In February 2021, microfinance institutions were instructed to halt electronic microloans without biometric identification or digital signatures.
- To shield affected citizens, MFIs have paused collecting interest and penalties on fraudulently obtained microloans and sent necessary info to credit bureaus to clean up credit histories.
- As of March 2021, all MFIs issuing online loans are required to authenticate and verify borrowers, compare application data with actual client data, match clients' biometrics with ID document data, and obtain the borrower's consent before approving a microloan.
Now, let's talk about regulatory agencies' general strategies to combat fake microloans. They often:
- Strengthen laws to clearly define legitimate microloans, penalizing unauthorized operations
- Implement sturdy verification processes for lenders
- Educate consumers about the risks and signs of fake microloans
- Regularly monitor the market for illegal activities and enforce actions against offenders
- Foster cooperation with financial institutions to combat fraud
For specifics on Kazakhstan's Financial Market Regulation and Development Agency's tactics, it's best to consult official reports or statements from the agency directly.
The decrease in fraudulent microloans in Kazakhstan, as reported by "Kazinform," saw a fourfold decrease in the first four months of 2021 compared to 2020, highlighting the significance of the finance industry in general-news and crime-and-justice sectors. The Kazakhstan Ministry of Internal Affairs (MVD) has identified these microloan scams as predominantly criminal, involving identity theft and faulty verification methods, particularly in electronic platforms, underlining the need for stricter business regulations.
