BAKU, Azerbaijan, Dec. 23
By Nargiz Sadikhova - Trend:
Kazakhstan’s Agency for the Financial Market Regulation and Development is constantly working to protect consumer rights, a source in the agency told Trend.
According to the agency, within the framework of his Address to the Kazakh people dated September 1, President Kassym-Jomart Tokayev instructed to take additional regulatory measures in terms of increasing the responsibility of credit institutions.
So, from January 1, 2020, credit partnerships, pawnshops, and online lending companies have been included in the agency's regulatory framework.
On behalf of the Head of State, this year requirements for equity capital have been increased (for pawnshops up to 70 million tenge ($166,600), for credit partnerships up to 50 million tenge ($119,040) and microfinance organizations up to 100 million tenge ($238,090)), qualification requirements for managers (having an impeccable business reputation, no criminal record) and technical requirements for the premises of pawnshops were established.
Registration of all non-banking organizations in the country was carried out. As of September 15, 2020, out of 3,100 microcredit entities, 227 microfinance organizations, 211 credit partnerships, and 667 pawnshops have been registered. The rest of the microcredit entities are inactive or don’t have the capital and are planning to cease their activities.
"To protect citizens and reduce the risks of fraud in the microfinance market, legislative amendments were adopted on July 3 this year, which provide for compulsory licensing of microfinance activities from January 1, 2021," the agency said.
By 2021, the provision of loans by microfinance organizations, credit partnerships, and pawnshops can only be carried out with a license from the agency.
Starting from March to August 31 this year, the agency, together with the General Prosecutor's Office, the Ministries of Finance and Internal Affairs of Kazakhstan, conducted inspections of 1,348 lending entities: in respect of 144 organizations, fines in the amount of 162 million tenge ($380,000) were imposed, 122 written instructions were issued.
"In case of violation of the rights of citizens and businesses by financial organizations, they can apply for support to the agency. The financial regulator accepts complaints and checks on each case of violation of the rights of consumers of financial services. For a prompt response, the agency has opened a hotline through which the population is provided with advice and allowed problematic issues on an individual basis," noted the source.
According to the agency's representative, in terms of increasing the responsibility of credit institutions, the Agency is constantly working to protect consumer rights.
"Measures are being taken to strengthen the pre-contractual work of the bank with the borrower, the main terms of the loan agreement, liability, risks of the lender, and the borrower are determined. Also, in case of temporary difficulties of the borrower to repay the debt, the lenders provide measures to restore the borrower's solvency by providing loan restructuring (drawing up a new schedule of payments) ", said the agency.
In turn, borrowers must properly fulfill their obligations to repay the loan and remunerate the lender.