A new law in Kazakhstan reportedly will tighten regulations and enhance transparency in the microfinance sector. The new regulation caps annual interest rates charged by microfinance institutions (MFIs) at 56 percent and requires all MFIs to hold account records at the National Bank of Kazakhstan, the country’s central bank. The minimum charter capital for each MFI has been set at KZT 30 million (USD 198,000). It is expected that risks in the sector will be less as MFIs unable to increase their charter capital to reach this amount will close. Microfinance institutions newly will be able to accept grants, borrow funds, offer leasing services and close insurance contracts on behalf of insurance companies.
Anatoliy Glukhow, the director of the 70-member Kazakh Microfinance Organizations Association, reportedly stated that “regulation has a favourable effect on foreign investors and due to this we expect an increase in foreign investments in the lending sector.”
As of 2011, 25 MFIs in Kazakhstan report to the US-based nonprofit Microfinance Information Exchange (MIX) an aggregate gross loan portfolio of USD 236 million disbursed to approximately 100,000 borrowers.
By Charlotte Newman, Research Associate
Sources and Additional Resources:
Caspionet, “2013 Will be a Time of Changes for Microfinance Organizations,” http://caspionet.kz/eng/business/2013_will_be_time_of_changes_for_microfinance_organizations_1357626952.html
MicroCapital.org, July 17, 2012, “MICROCAPITAL BRIEF: Parliament Votes for Tougher Regulation of Microcredit Organizations in Kazakhstan,” https://www.microcapital.org/microcapital-brief-parliament-votes-for-tougher-regulation-of-microcredit-organizations-in-kazakhstan/
MicroCapital.org, December 18, 2012, “MICROCAPITAL BRIEF: Kazakhstani Government Looking to Triple Microloan Volume by Boosting Microcredit Portfolio to $80m,” https://www.microcapital.org/microcapital-brief-kazakhstani-government-looking-to-triple-microloan-volume-by-boosting-microcredit-portfolio-to-80m/
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