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Astana, Kazakhstan • 20 October, 2023 | 16:51

Kazakhstan Considers Restrictions to Combat Debt Delinquencies

Mazhilis speakers criticize financial institutions for excessive loan advertisements

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Freepik/tirachardz
Freepik/tirachardz

Kazakhstan is reviewing legislation to address the issue of over-indebtedness among the citizens due to consumer loans, QazMonitor reports.

The Chairman of the Mazhilis of the Parliament, Yerlan Koshanov, raised the issue of over-indebtedness among the population during the parliamentary hearing on October 20.

"It has become common for people to have two or more loans, and they are forced to repeatedly seek new loans to pay off the previous ones. This raises the question: How do banks grant these loans while knowing that the previous ones are still unpaid? Moreover, the practice shows that people do not thoroughly understand the terms of their banking agreements. All these impulsive actions later lead to divorces, alcoholism, suicides, and gambling addiction. In their pursuit of quick money, people become easy targets for financial pyramids and other types of fraud," stated Yerlan Koshanov during parliamentary hearings.

Koshanov pointed out that financial institutions contribute to this problem through enticing advertisements and making the loan application process excessively accessible.

“Today, even 14-16-year-old teenagers can apply for online loans with just a smartphone and an internet connection. Is it possible for individuals of such a young age to bear financial responsibility? As a result, parents, grandparents, and other family members often end up repaying these loans on their behalf,” added the speaker.

In response, the Minister of Finance, Yerulan Zhamaubayev, pledged to reevaluate terms and conditions for granting loans. He stated that legislation will be reviewed to address the issue of over-indebtedness among the citizens due to consumer loans. The minister proposed to prohibit the issuance of new loans to borrowers with existing debt delinquency.

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