Kazakhstan passes law toughening personal loan requirements
ASTANA. June 19 (Interfax) - Kazakh President Kassym-Jomart Tokayev has signed the law On Changes and Amendments to Some Legislative Acts of the Republic of Kazakhstan Concerning Minimization of Risks in Lending, Protection of Borrowers' Rights, Financial Market Regulation and Improvement of Enforcement Proceedings, the presidential press service said.
The law introduces some provisions aimed at preventing an increase of the population's debt burden. In particular, it prohibits the issuing of loans to citizens who have loan delinquency of more than 90 days. However, this ban does not apply to loan refinancing. The document also prohibits the issuing of loans without a spouse's consent.
Servicemen are exempt from loan fees for the period of conscription and for 60 days after demobilization.
Banks and microfinance organizations are banned from transferring individuals' debts to collectors until May 1, 2026. Transfers will only be possible from that date if certain conditions are observed, including the expiration of 24 months from the date of origin of the debt and mandatory debt settlement events.
The bank ombudsman is empowered to consider all loan disputes (previously they could only consider disputes on mortgage contracts). The institution of a microfinance ombudsman has been introduced. Ombudsmen's decisions are binding on financial organizations if individuals agree with them.
Foreclosure on pledged real estate of individuals who belong to socially vulnerable categories is prohibited in the period of consideration of appeals by ombudsmen. These categories can also buy the housing they rent that earlier went on a bank's balance due to non-fulfilment of obligations.
The document prohibits the eviction of families with underage children and people of Group 1 and 2 disabilities from their only housing during the heating season.
The amount of funds that cannot be recovered from a bank account towards debt repayment has been increased from one survival minimum (43,407 tenge) to two survival minimums.
The document introduces regulations for facilitated enforcement proceedings in the recovery of administrative fines and tax debt in an amount of up to 20 minimal wage packets (the minimal wage is 3,692 tenge in 2024). Enforcement will be conducted by justice bodies via an automatic system, which will exempt citizens from payment for services of private bailiffs. In the event of disagreement with such mechanism, enforcement proceedings will take place according to the general rules.
The document facilitates personal insolvency procedures. Citizens are no longer required to submit lists of creditors and copies of documents confirming debt settlement procedures. This information will be requested from credit bureaus, where creditors are obligated to send the corresponding information.
Mandatory biometric identification for online loans has been introduced to prevent fraud.
A ban on the issuance of loans in situations when a credit bureau has information on citizens' voluntary refusal to take loans was introduced earlier. The law obligates financial organizations to write off debt on loans issued in breach of this ban. Under the adopted law, the ban will not apply to microloans issued by pawnshops.
Debt on loans on which there are judicial acts will be written off providing that they were issued under the influence of fraudsters.
The law improves mechanisms governing the sale of the assets of banks and microfinance organizations by introducing a specialized electronic trading site.
