Seven microfinance organizations (MFOs) in Kazakhstan have lost their licenses following inspections that uncovered violations, the website infohub.kz reports.
According to the website of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market (ARDFM), inspections of the activities of certain MFOs were carried out. They revealed systematic violations of legal requirements that resulted in infringements on the rights of consumers of financial services.
As a result, decisions were taken to revoke the microfinance licenses of seven MFOs. They include:
MaxMoney MFO LLP;
Microfinance Systems MFO LLP;
SurfKaz Finance MFO LLP;
MFO No. 1 MFO LLP;
Umit Finans MFO LLP;
Vivus MFO LLP;
EL QAZYNA MFO LLP.
"The decisions taken are aimed at stopping violations, preventing unfair practices, increasing the accountability of participants in the microfinance market and ensuring compliance with legal requirements," the ARDFM said.
The agency added that an MFO whose license has been revoked is not entitled to carry out microfinance activities or to change the terms of existing microcredit agreements, except in certain cases.
"Under the law, an MFO must, within 30 calendar days from the date its license is revoked, complete a re-registration procedure by removing from its name the words 'microfinance organization,' words derived from them, or an abbreviation implying that the said legal entity provides microcredits, or take a decision on reorganization or liquidation. Clients of an MFO who have unfulfilled obligations under microcredit agreements are liable for breach of their obligations in accordance with the terms of the agreements concluded," the agency said.