BAKU, Azerbaijan, February 20. Demand for business loans in Kazakhstan during 4Q2022, from small and medium enterprises exhibited mixed dynamic depending on the size of the issuing bank, Trend reports, referring to the National Bank.
The data on demands was received based on the survey results carried out by the National Bank among the 19 banks operating in the country.
Demand for business loans in smaller banks increased, while the interest of businesses for obtaining loans in the largest banks cooled down significantly, particularly due to the tightening lending conditions. The major indicator pointing to more difficult conditions was the increase in the interest rate.
While large banks suffered from declining demands, the number of applications for these products continued to grow in other, smaller banks, thus contributing to an increase in the total number of loan applications. The number of applications reached 512,000, which is a 23 percent increase in quarter-over-quarter terms, while the average loan order size decreased by 13 percent q/q to 22.5 million Kazakh tenge ($50,326).
Approval rates for medium and large business loan applications reached 51 and 73 percent, respectively. At the same time, the approval rate for small business loan applications declined and reached 39 percent.
The rise of interest rates for business loans in Kazakh banks can be attributed to the high base interest rate of the National Bank, which was enforced to combat alarmingly increasing inflation.
The latest calculations indicate that annual inflation in Kazakhstan reached 20.7 percent. The current base interest rate is set at a 16.75 percent level.