About Measures to Curb Growth of Consumer Lending

The Agency for Regulation and Development of the Financial Market has developed a draft decree of the Agency's Management Board "Amendments to Certain Regulatory Legal Acts of the Republic of Kazakhstan on Regulation of Banking and Microfinance Activities".

The draft has been developed in order to improve regulatory framework for regulation of banking and microfinance activities and is designed to curb growth rate of consumer lending and prevent excessive debt burden of citizens.

The draft includes the following provisions:

- extend requirement for calculation of the borrower's debt burden ratio (BDR) to loans to individuals (except for individual entrepreneurs) issued for business purposes;

- introduce a ban on issue of unsecured consumer loans with a term of over 5 years in case of an overdue payment of more than 30 days, ineffective restructuring (restructuring after which a delay was allowed or the amount of debt did not decrease), forgiven loans over the past 36 months;

- limit a maximum value of the BDR to 0.25 for unsecured consumer loans with a term of 3 to 5 years, as well as for borrowers with an overdue for over 90 days for the past 12 months;

- ensure risk-weighting of unsecured consumer loans issued for a term of over 3 years at 350%;

- eliminate the requirement to calculate the BDR for loans within implementation of the Mortgage Housing Loan Refinancing Program;

- remove mandatory pension contributions and individual income tax from official income in order to eliminate overstatement of the amount of actually received income.

Full text of the document is available on the Internet resource of the Agency.