Solva fails to become a bank in Kazakhstan

Kazakhstan’s regulator has rejected Alexander Dunaev and Boris Batin’s application to acquire the status of large stakeholders / Collage by Kursiv.media, photo editor: Aruzhan Makhsotova

The Agency for Regulation and Development of the Financial Market (ARDFM) has declined an application submitted by the Solva microfinance organization (MFO) to reorganize itself into a bank. Solva has been pursuing this status for several years.

According to the regulator, the company’s final beneficiaries, including Alexander Dunaev and Boris Batin, were denied the status of large stakeholders in the proposed bank.

Solva has been working on its transformation into a bank for the past few years. Madina Abylkassymova, chair of the ARDFM, stated that the regulator refused to accept the documents submitted by the MFO due to noncompliance with regulatory requirements, including capital adequacy. As of the beginning of this month, the documents were still being considered by the regulator.

Konstantin Barabanov, director general of Solva, described the regulator’s rejection as a routine issue. The deadline for reviewing such applications is regulated by law, and the ARDFM met that deadline.

«If we, the applicants, failed to address all comments in time, the regulator had no choice but to reject the application. Our plan to transform the company into a commercial bank remains unchanged and we intend to resolve the issues with our documents and resubmit them shortly,» Barabanov said in a statement.

In October, Barabanov noted in an interview with Kursiv that the MFO hoped to complete all legal procedures by the end of the year and achieve bank status by 2025. He acknowledged that the transformation process is challenging for both the company and the regulator.

According to National Bank statistics, as of October 1, Solva ranked fourth among MFOs in Kazakhstan, with $232.3 million in assets. At the time, the company reported a loan portfolio (principal debt) of $205.8 million, $17 million in non-performing loans (NPL 90+), $192 million in liabilities, $40.4 million in equity capital and $1.6 million in net profit — a 25% increase compared to last year. Solva’s final beneficiaries are foreign citizens Boris Batin, Alexander Dunaev and Neo Crystal Holdings Ltd, based in the UAE.