Kazakhstan’s Agency for Regulation and Development of the Financial Market (ARDFM) has revoked the licenses of seven microfinance organizations (MFOs) for systematic violations of the law and clients’ rights. According to the National Bank of Kazakhstan, as of July 1, 2024, the companies had combined assets of 14.4 billion tenge and a total loan portfolio of 17.6 billion tenge. Six of the seven ranked among the country’s 100 largest MFOs by assets.
The regulator announced the license revocations on Oct. 23. The affected companies are MaxMoney, Microfinance Systems, SurfKaz Finance, MFO№1, Umit Finance, Vivus and EL QAZYNA.
The ARDFM said inspections had uncovered systematic legal violations that infringed on the rights of financial service consumers. However, it did not specify the violations committed by each company.
MFO№1 was the largest of the seven organizations to lose its license. As of July 1, it ranked 27th by assets among the 213 MFOs operating in Kazakhstan.
The company’s assets totaled 6.74 billion tenge, accounting for nearly 47% of the seven firms’ combined assets. Despite the license revocations, most of the companies reported positive financial results as of July 1.
Umit Finance was the most profitable, reporting earnings of 607.85 million tenge.
Following the revocation of their licenses, the companies may no longer issue microloans or change the terms of existing agreements, except in cases permitted by law.
Within 30 days, they must either undergo re-registration after removing the term «microfinance organization» and related designations from their names, or decide to reorganize or liquidate.
The license revocations do not cancel borrowers’ outstanding debts. Clients remain obligated to meet the terms of their existing agreements and are liable for any breaches.
