The Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market responded to an inquiry from deputies of the Ak Zhol faction, who proposed banning online lending as a factor contributing to excessive household indebtedness and fraud.
“Introducing a legislative ban on this type of lending may lead to the closure of all existing online micro-lending companies and the formation of a shadow sector for issuing online microloans.
Taking into account the legislative and regulatory measures already adopted to tighten regulation of the microcredit segment, including reducing overpayment to 50% of the principal debt, calculating and complying with the debt burden ratio, lowering interest rates, and introducing procedures for resolving problem microloan debt, the Agency will continue to conduct ongoing monitoring of the situation and assess the level of household indebtedness,” the response states.
The financial regulator also noted that today, in many economically developed and developing countries, there exists a segment of consumer online micro-lending.
“The issue of banning online micro-lending should be considered in terms of ensuring a balance between the interests of microfinance market participants and the protection of consumers’ rights to financial services,” the response emphasizes.
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