NUR-SULTAN – President Kassym-Jomart Tokayev signed a decree June 26 providing immediate debt relief to some of the country’s most vulnerable groups.
The President’s one-time action calls for the government to take measures to repay unsecured consumer loans in second-tier banks and microfinance organisations for certain segments of the population, including large families, families that have lost their main breadwinners, families with children with disabilities, adults who have been disabled since childhood, recipients of state targeted social assistance, orphans, children left without parental care under the age of twenty-nine and those who lost their parents until the age of majority.
According to First Deputy Prime Minister and Minister of Finance Alikhan Smailov, the measures should help approximately 500,000 people, primeminister.kz reports.
“The position of the President is that the situation with consumer loans should not be repeated,” he said during a June 27 press conference.
The state will repay debts up to 3 million tenge (US$7,905) and interest up to 300,000 tenge (US$790) in second-tier banks and microfinance organisations as a one-time, targeted financial assistance measure for each borrower from the above-mentioned category of citizens. The borrowers’ accrued fines and penalties will be written off as of July 1.
The decree also instructs the Kazakh National Bank to increase regulations on consumer loans. This includes imposing a ban on the accrual of penalties, commissions and other payments related to the issuance and servicing of loans for all unsecured consumer loans of individuals more than 90 days overdue.
The bank should also ban loans to citizens with incomes below the subsistence minimum (29,698 tenge or US$78.25 per month) to avoid further deterioration of their financial situation. It will take additional regulatory measures when issuing unsecured consumer loans, such as considering the overall ratio of the debt burden on a borrower and imposing additional requirements for bank equity, among other steps.