The Kazakh Ministry of Justice is reportedly in the process of registering a new law regulating microfinance that requires all “microcredit organizations” to convert to “microfinance organizations” within three years. Under the law, microfinance organizations differ from microcredit organizations in that the former are registered and supervised by the National Bank of Kazakhstan, the country’s central bank. The law will require microfinance organizations to fully disclose to borrowers the cost of loans, including the total amount to be repaid. It will establish a minimum charter capital for microfinance organizations of KZT 30 million (USD 197,000). Also, it will prohibit non-bank financial institutions from advertising themselves as creditors without either status as a loan cooperative or valid registration as a microfinance organization.
By Nicole Boyd, Research Associate
About National Bank of the Republic of Kazakhstan
The National Bank of the Republic of Kazakhstan is the central banking authority of the country. The bank develops and implements monetary policy, regulates financial institutions, ensures the protection of the rights of consumers of financial services and aims to maintain the stability of the financial system. As of December 31, 2011, the National Bank of Kazakhstan reported total assets of KZT 5.2 trillion (USD 34.4 billion).
Sources and Additional Resources:
Caspio Net (Kazakhstan). “Microfinance market on the rise in Kazakhstan,” http://caspionet.kz/eng/business/Microfinance_market_on_the_rise_in_Kazakhstan_1361332321.html
MicroCapital. January 31, 2013, “MICROCAPITAL BRIEF: New Microfinance Regulation in Kazakhstan Caps Interest Rates at 56%, Seeks to Increase Transparency, Foreign Investment,” http://www.microcapital.org/microcapital-brief-new-microfinance-regulation-in-kazakhstan-caps-interest-rates-at-56-seeks-to-increase-transparency-foreign-investment/
MicroCapital. December 18, 2012, “MICROCAPITAL BRIEF: Kazakhstani Government Looking to Triple Microloan Volume by Boosting Microcredit Portfolio to $80m,” http://www.microcapital.org/microcapital-brief-kazakhstani-government-looking-to-triple-microloan-volume-by-boosting-microcredit-portfolio-to-80m/
MicroCapital. July 17, 2012, “MICROCAPITAL BRIEF: Parliament Votes for Tougher Regulation of Microcredit Organizations in Kazakhstan,” http://www.microcapital.org/microcapital-brief-parliament-votes-for-tougher-regulation-of-microcredit-organizations-in-kazakhstan/
MicroCapital Universe Profile: National Bank of Kazakhstan http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Bank+of+the+Republic+of+Kazakhstan
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