About Self-Regulation Model in Microfinance and Collection Services
Comment by Nurzhan Bidaibek, Director of the Department for Regulation of Non-Banking Organizations
Today, all necessary conditions for transition to a self-regulatory model have been created in the microfinance and collection services markets of Kazakhstan.
Seven professional associations operate in the country, uniting market participants and promoting their institutional development:
- Association of Microfinance Organizations of Kazakhstan;
- National League of Pawnshops of Kazakhstan;
- Kazakhstan FinTech Association;
- Association of Credit Unions of the Agro-Industrial Complex;
- Union of Credit Unions of the Agro-Industrial Complex;
- National Chamber of Collectors of Kazakhstan;
- The Association of Collectors of Kazakhstan, which was transformed in July 2025 into a voluntary self-regulatory organization (hereinafter referred to as SRO).
Availability of such associations creates a solid foundation for implementation of self-regulation, which will improve effectiveness of supervision and provide additional protection for rights of financial service consumers. Self-regulation helps enhance confidence of consumer and government in the sector. For market participants, this means uniform operating standards, reduction in violations, internal control and a more rapid response to risks, as well as reallocation of regulatory resources from ongoing supervision to market development.
The practice of SRO introduction into the financial market is broadly used abroad. In Australia, the Australian Banking Association unites 22 banks, promotes industry development policies and establishes uniform standards. In Canada, the Chambre de l'assurance de dommages (ChAD) is responsible for compliance with ethical standards and mandatory professional development for insurance professionals. In India, the Microfinance Industry Network (MFIN), recognized as the first SRO in the microfinance sector by the Reserve Bank of India, ensures responsible lending and client protection. In Korea, the National Credit Union Federation of Korea (NACUFOK) coordinates operation of all credit unions in the country, providing supervision, consultation and training. In Russia, the SRO institution has been in operation since 2015 and it encompasses microfinance organizations, microcredit companies, and credit cooperatives. In Kazakhstan, following the international practice, it is planned to empower SROs to review appeals from borrowers who are SRO members, conduct inspections of participants, and implement internal enforcement actions. The Agency will retain its supervisory functions with focus on high-risk entities and activities of the SROs themselves.
Therefore, introduction of self-regulation in the microfinance and collection services sectors will help establish uniform operating rules, improve quality of the provided services, reduce violations and create a balanced regulatory model that combines supervision with development.
External Communications Directorate