The Agency for Regulation and Development of the Financial Market explained the changes in the procedure for issuing microloans. This was reported by Qazaqyia.kz citing Sputnik Kazakhstan.
Today, the requirements for issuing microloans have changed significantly. Previously, such loans had an interest rate of 1 percent per day. The annual rate must not exceed 179 percent.
Other restrictions on loans: - maximum amount of consumer microloan; - ban on issuing unsecured loans for more than five years; - mandatory 24-hour decision-making period after concluding the contract; - additional restrictions on remote issuance of online microloans.
"Special attention is paid to preventing excessive debt burden on citizens. Restrictions on issuing new microloans to citizens with overdue debts on bank loans or microloans, as well as to borrowers whose debts have been written off in the last three years, are being introduced gradually," agency specialists said.
In addition, to prevent mass assignment of problem debt to collection agencies, a moratorium on assignment of debts of individuals has been introduced. It has been extended until May 1, 2027.
New requirements
Requirements for microfinance organizations and collectors have also been tightened. In particular, the authorized capital of microfinance organizations must now be at least 200 million tenge, instead of the previous 100 million tenge. The maximum level of non-performing microloans must not exceed 10%.
Requirements for collection activities: - strengthening qualification requirements for the business reputation of managers; - prohibition of affiliation of collection agencies with financial organizations and other collection agencies; - prohibition of simultaneous work in several collection agencies; - prohibition of interaction of agencies with notaries and private bailiffs who are their affiliated persons.
In addition, to increase their responsibility, the amount of administrative fines has been doubled. Personal administrative and criminal liability has been introduced for employees of collection agencies for abuse and exceeding their powers.
Frequent violations
Earlier, licenses were revoked from 99 microfinance organizations that systematically violated the law, and licenses of another 29 organizations were suspended. 47 organizations were excluded from the register of collection agencies.
Frequent violations were also identified during inspections. They include: - issuing microloans without complying with requirements for calculating the debt burden ratio or with its overestimation; - violation of restrictions on the annual effective interest rate; - issuing microloans in the presence of legislative restrictions; - providing unreliable reports and data to credit bureaus; - violation of the established procedure for interaction with debtors.
It is worth noting that currently there are 211 microfinance organizations and 205 collection agencies operating in Kazakhstan.