Pandemic and New Regulations Have Affected Lending in Kazakhstan

According to Asem Nurgaliyeva, executive director of the First Credit Bureau, in 2020 retail lending in Kazakhstan stepped into the zone of modest growth and declined from 20% in 2019 to 9% in 2020. 

The slowing of the lending growth rate was reported amid the epidemiological crisis. The new, stricter regulations have also affected this process. As a result, the portfolio of retail loans in 2020 was about 7.1 trillion tenge ($16.9 billion).

Car title loans became the most successful sector, increasing by 22% to 707 billion tenge ($1.7 billion). The volume of unsecured loans remained at 3.8 trillion tenge ($9 billion). The credit card portfolio was also stable at a level of $533 million.

However, the number of secured loans for consumers has declined by 4% to $1.2 billion. Another big sector, mortgage credits, was about $4.5 billion at the end of last year.

«Lending institutions issued loans last year for $9.8 billion, which 90% less than the prior year. The number of unsecured loans has also shrunk. The reasons for these changes are absolutely clear. We had a quarantine in 2020 and many other factors also affected this process,» Nurgaliyeva said at today’s press briefing.

The loan market became more stable in the fall with just a slight decrease. 

The unsecured loans segment has dropped by 11% to 2.4 trillion tenge ($5.7 billion). At the same time, people were prone to credit cards and car title loans.
 
More than 1.1 trillion tenge ($2.6 billion) were issued last year as mortgage credits. About 80% of the mortgage loans have been issued with help of public funds, according to the First Credit Bureau. 

The total debt for retail and business credits including banks, microfinance and quasi-public organizations in 2020 reached 21.7 trillion tenge ($51.9 billion). In comparison to 2019, this rate increased by 6.5% or $3.1 billion while in the first half of last year, Kazakhstani banks reported a decline in their retail loan portfolios.