In Kazakhstan, demand for auto loans rose by 20% in the second quarter, reaching 1.5 million applications. However, banks approve only 18% of applications, meaning only every fifth request gets a positive decision. This was reported by Qazaqyia.kz citing Kursiv Media.
According to a bank lending survey conducted by the National Bank, demand for auto lending increased significantly in the second quarter – by 20% compared to the previous quarter, to 1.5 million applications. The main factors behind the growth in demand in this segment were discounts from car dealerships and programs with subsidized interest rates from large banks. At some medium-sized banks, demand was linked to the resumption of active lending and expanded cooperation with dealers. At the same time, the average size of applications decreased by 3% – to 7 million tenge.
Auto loans also saw a slight tightening of conditions due to higher rates and stricter borrower requirements. Banks approve only 18% of applications, while the approval rate rose by 3 percentage points over the quarter. Thus, banks reject about 82% of applications.
In the third quarter, demand for auto loans is expected to grow. This will be driven by the resumption of partnership programs with dealers and the continuation of campaigns to subsidize interest rates. It is also expected that conditions for auto loans will ease due to rate cuts by one medium-sized bank and the continuation of promotions at one large bank.
Earlier, the Ministry of Industry proposed that the government and the National Bank not take into account the debt burden ratio (DBR) when issuing auto loans in Kazakhstan.
Changes in the auto lending market
Data for the second quarter show significant changes in the auto lending market. Despite rising demand, bank approval rates remain low. This reflects banks' cautious risk assessment policies. The increase in the approval rate by 3 percentage points is a positive trend, but the overall situation remains strict.
Future outlook
In the third quarter, further growth in demand is expected. This is due to the resumption of partnership programs between banks and dealers and the continuation of subsidy campaigns. In addition, rate cuts by some banks could lead to softer conditions.
Government proposal
The Ministry of Industry's proposal to exclude DBR is aimed at stimulating auto lending. If this measure is adopted, bank approval rates could rise, making it easier for Kazakhstanis to buy cars.
Conclusion
The current situation in the auto lending market shows a gap between demand and supply. Despite banks' strict policies, demand is growing. Forecasts for the third quarter are optimistic, but actual results will depend on banks' policies.