Overview of changes in the activities of microfinance organizations in Kazakhstan in 2024
In 2024, microfinance organizations (MFOs) in Kazakhstan will face a number of important changes in legislation aimed at protecting consumer rights and regulating the market. These innovations will affect a wide range of issues, from lending and bankruptcy to protecting the interests of military personnel and families with children. In this overview, we will consider the key changes that will come into force this year.
Ban on loans for debtors with overdue payments
One of the most important changes concerns the issuance of loans. Now MFIs are prohibited from providing unsecured loans to citizens who have overdue debt for more than 90 days. The only exception is cases of refinancing. This innovation is aimed at reducing the level of indebtedness and improving the financial stability of borrowers.
Support for military personnel
Attention is also given to the protection of military personnel's rights. During their service and for 60 days after demobilization, they are exempt from accruing interest on loans. This will help reduce the financial burden on those who are fulfilling their duty to the nation and provide them with financial support during challenging times.
Restrictions on transferring debts to collectors
A ban on transferring individuals' debts to collectors is being introduced until May 1, 2026. After this date, debt transfer will only be possible under strict conditions, which will help protect borrowers from aggressive collection methods.
Expanding the powers of ombudsmen
The role of ombudsmen in the financial sector is significantly enhanced. Banking and microfinance ombudsmen have received expanded powers to resolve disputes. Now their decisions will be mandatory for financial institutions with the consent of citizens, which will increase the fairness and effectiveness of conflict resolution.
Protection from eviction during the heating season
Another important change concerns the protection of citizens from eviction during the heating season. Now families with minor children and persons with disabilities of groups 1 and 2 cannot be evicted from their only home during this period. This innovation is aimed at ensuring the stability and safety of families during the cold season.
Increasing the amount of funds not subject to collection
The amount of funds that cannot be collected from a bank account to pay off a debt has been increased from 1 to 2 subsistence minimums. This change will allow borrowers to save money for the most necessary things, which is especially important in case of financial difficulties.
Simplifying the bankruptcy process and biometric identification
The bankruptcy process for individuals has been simplified, which should make the procedure more accessible and transparent. Mandatory biometric identification for online loans is also being introduced, which will help reduce the risk of fraud and protect the personal data of citizens.
Change in annual effective interest rate (AEIR)
In 2024, the maximum rate of the annual effective interest rate will be reduced from 56% to 46% for unsecured bank loans and microloans issued by MFIs. This change is aimed at reducing the cost of loans for consumers and improving lending conditions.
New requirements for loans
Financial institutions will have to take into account new requirements when issuing loans. Now, to obtain a loan exceeding 1 thousand monthly calculation indices (MCI), it will be necessary to obtain the consent of a spouse. A voluntary restriction on receiving loans will also be introduced, allowing citizens to refuse to take out loans.
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