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Growth in consumer loans extended to individuals in Kazakhstan has begun to slow down, a trend observed after the implementation of new restrictive measures by financial regulators. In contrast, lending to businesses is experiencing a significant acceleration.

National Bank's Rationale for Credit Restrictions

Over the past three to four years, consumer loans saw an annual increase of approximately 30 percent. In response to this rapid expansion, the National Bank, in collaboration with the Agency for Regulation and Development of the Financial Market, introduced a series of measures to curb excessive growth in consumer lending.

"We have implemented a range of measures aimed at limiting the excessive growth of consumer loans. Specifically, we introduced a sectoral countercyclical capital buffer for loans granted to individuals," stated Timur Suleimenov, Chairman of the National Bank of Kazakhstan.

Adjustments to Loan Terms and Tax Policies

Furthermore, requirements related to the terms of consumer loans have been tightened. Previously, according to the head of the National Bank, such loans could be issued for terms of 5, 7, or even 9 years. This allowed for lower monthly payments and provided avenues to circumvent certain existing restrictions.

Tax measures have also been enacted. Banks will now be taxed on income derived from lending to individuals at a rate of 25 percent. For loans provided to businesses, the corporate income tax rate remains at 20 percent.

"This provides banks with additional incentives to lend more to businesses than to individuals," Suleimenov emphasized.

Observed Outcomes

According to Suleimenov, these measures are already yielding results. The growth of consumer loans has slowed to around 10 percent, while lending to businesses continues to grow at a robust pace of approximately 18 percent.