National Bank of Kazakhstan preparing reforms that will affect online microlenders

The National Bank of Kazakhstan is preparing the largest reform in ten years, which will greatly impact online lenders. Currently, the online microloan market in Kazakhstan is almost not regulated at all. This has led to situations where loans are being issued at what amounts to interest rates of 700-1000% per annum. Additionally, online microloan creditors are collecting personal information on borrowers (such as credit card data and credit histories) without receiving written consent from them.

The proposals of the National Bank, if passed, would restrict interest rates and begin to set rules for how online microlenders operate. Still, the efforts currently underway are widely considered as incomplete in addressing all the issues. What is certain is that online microlenders are catering to a market that has a strong demand for credit. For example in 2017, 944,000 electronic credit contracts were concluded for KZT 39.8 billion. With proper regulations, the online microloan industry in the country could experience a boom of activity in the coming years.