Kazakhstan’s National Bank identifies microfinance, insurance organisations’ 2018 violations

ASTANA – The Kazakh National Bank recently identified microfinance and insurance organisations’ violations of consumer rights and interests committed in 2018.

Photo credit: kazpravda.kz.

The bank applied 17 sanctions and limited measures to microfinance organisations and eight sanctions and limited measures to insurance organisations.

Microfinance organisations provide financial services, such as microsavings, microloans, micro-insurance products and money transfers to clients from low socioeconomic backgrounds to enable investment in enterprises, living conditions, health and education. The aim of microfinance is to alleviate poverty. The Kazakh law On Microfinance Organisations regulates activity on microcredit provision and establishes special aspects of microfinance organisations’ legal status, establishment, activity, state regulation, control and supervision.

Violations by microfinance organisations KazAkhsha, Senim, Comfort Finance, HeartAsiaCredit, Senate 2050, Batys Finance, Kazcredit and Bereke included inconsistency of their agreements on microcredit provision with Kazakh legislation requirements. Microfinance organisation ALHalal Finance’s violation was the late submission of quarterly reporting, microfinance organisation Tumar failed to fulfil the National Bank’s obligations to apply limited measures and microfinance organisation Finbox failed to specify the annual interest rate according to legislation requirements in its contracts.

Microfinance organisations Financial Store, Tumar, HeartAsiaCredit and Senim received fines and penalties. Microfinance organisations Finbox, KazAkhsha, Senim, Comfort Finance, HeartAsiaCredit, Finance Invest, Credit – Region, ALHalal Finance, Senate 2050 and Batys Finance received limited measures and written prescriptions.

Insurance organisations provide contracts in which individuals or entities receive financial protection or reimbursement against losses. Personal insurance policies include auto, health, homeowners and life, while business insurance policies insure against the specific types of risks faced by firms.

Administrative fines were issued to insurance organisations Kompetenz, TransOil and Eurasia. Limited measures and written prescriptions were also issued to insurance organisations Kompetenz, Nomad Insurance, Halyk-Kazakhinstrakh and Eurasia.

The insurance organisations did not comply with deadlines on implementing an insurance payment refusal, notifying applicants of insufficient documents for insurance payment, producing a vehicle inspection report and determining damage from vehicles.

The National Bank, formed in 1993, is the country’s central bank and the Kazakhstan Deposit Insurance Fund founder and sole shareholder. Sanctions and limited measures levied on microfinance and insurance organisations are listed on www.nationalbank.kz.