On trends in bank lending and anti-crisis measures of the Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market

Since 2020, the Agency, together with the National Bank and the Government, has been implementing a set of anti-crisis measures to support businesses and the population and ensure the stability of the financial system.

To minimize the effect of the pandemic on the sustainability of the banking sector, temporary prudential measures aimed at providing sufficient capital and liquidity have been in place since March 2020.

Among the key measures is the decrease of requirements for the conservation buffer of banks' equity capital by 1 p.p. from 2% to 1%. Also, risk-weighting ratios in calculating the adequacy of equity capital for loans and guarantees issued to SMEs and syndicated loans were halved from 100% to 50%.

In the context of continuing credit risks and uneven recovery in various sectors of the economy, the banking sector continues to support the economy and its customers.

The list of collateral recognized as "solid" in the calculation of provisions includes PPP projects, and guarantees of quasi-state companies (JSC NWF "Samruk-Kazyna", JSC "NUH "Baiterek"), the list of liquid collateral in the calculation of capital adequacy and risk per borrower has been expanded.

In the context of continuing credit risks and uneven recovery in various sectors of the economy, the banking sector continues to support the economy and its customers.

Against the background of the growth of lending to the economy since the beginning of the year by 3.3% to 15.1 trillion tenge, the increase in lending to the corporate sector amounted to 0.8% to 7.2 trillion tenge, which is due to the processes of recognizing losses and writing off non-performing loans issued to legal entities.

In the retail lending segment, the focus is shifted sequentially from high-risk consumer loans to less risky mortgages. Thus, since the beginning of the year, loans to individuals have increased by 5.6%, mainly due to a 6.1% increase in consumer loans. Taking into account repayment of mortgage loans through lump-sum pension payments, the mortgage portfolio grew by 3.4%.

This year, the Agency decided to extend the validity of certain regulatory eases until the end of this year. In particular, measures will be maintained to reduce the risk-weighting coefficients for loans and guarantees issued to SMEs and syndicated loans, as well as to expand the list of "hard" collateral. In addition, the recognition of guarantees of quasi-state holdings (JSC NWF "Samruk-Kazyna", JSC NUH "Baiterek") as liquid collateral will be maintained, which will allow banks to maintain their ability to lend to SMEs that do not have collateral.

To ensure the access of small and medium-sized businesses to finance, state programs for lending to businesses at preferential rates are being implemented ("Program for preferential lending to small and medium-sized businesses", "Economy of Simple Things", "Business Roadmap-2025"). In total, for the whole of 2020 and 4 months of this year, loans in the amount of more than 2.0 trillion tenge were issued under these state programs.

In accordance with the instructions of the Head of State, a mechanism for subsidizing interest rates of up to 6% per annum on all existing loans to SMEs for a period of 12 months, starting from the declaration of a state of emergency (from March 16, 2020, to March 15, 2021), has been activated to support SMEs in the affected sectors of the economy.

At the moment, 4,055 SME entities or 95.3% of the total number of approved SME borrowers in the amount of 22.3 billion tenge have received subsidies.

In addition, in the implementation of the order of the Head of State, the subjects of SMEs in the affected sectors of the economy in the period from April 1 to July 1 of this year were granted another deferral of payments on loans. As of today, 329 SMEs have already taken advantage of the postponement on bank loans in the amount of 5.5 billion tenge and 60 SMEs on micro-loans in the amount of 65.7 million tenge