Microfinance organizations that are not licensed are liquidated or reorganized

   As of April 1 of this year, 883 subjects of the microfinance market, including 178 microfinance organizations (MFOs), 542 pawnshops and 163 credit partnerships, received agency licenses to carry out microfinance activities. This was reported by the business information center Kapital.kz with reference to the financial regulator.

   From January 1, 2021, licensing of microfinance activities has been in effect in Kazakhstan. MFO market regulation was introduced to reduce risks in the non-banking sector, increase its transparency and to protect the rights of consumers of financial services.

   As of March 1, 2021, representatives of 1 thousand 24 companies applied to the Agency of the Republic of Kazakhstan for the Regulation and Development of the Financial Market with an application for a license to conduct microfinance activities.

   In November 2020, the Microfinance Licensing Rules were approved. They provide requirements for the automation of accounting, impeccable business reputation and qualifications of executives, the absence of unexpunged or outstanding convictions for MFO participants, connection to the anti-money laundering information system, and premises security standards.

   “Additionally, to simplify the licensing process, a list of documents and information confirming compliance with the established requirements was determined. Taking into account the tight deadlines,  The Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market, together with the Association of Microfinance Organizations, the National League of Pawnshops of Kazakhstan and the Association of Credit Partnerships of the Agro-Industrial Complex, jointly worked to clarify all stages of licensing to participants in the microcredit market. Consideration of applications was carried out in compliance with the established deadlines, licensees were given the opportunity to submit documents both in electronic form - through the web portal of "electronic government", and in paper form - through the office, ”says the agency's deputy chairman Nurlan Abdrakhmanov.

   In order to ensure the sustainability of MFOs, the availability of financial, technical means and personnel to comply with the minimum standards, requirements for the size of the authorized and equity capital of MFOs were established in November 2019.

   For operating entities, a phased increase until 2023 of the minimum capital values ​​for MFOs from 30 to 100 million tenge, for credit partnerships - from 10 to 50 million tenge, for pawnshops - from 10 to 70 million tenge. At the same time, the newly created organizations must form the authorized and equity capital at the level of increased minimum values.

   "The introduction of licensing will allow to ensure control over compliance by the subjects of the microfinance market with the limit values ​​of the annual effective rate of remuneration, to prevent them from carrying out illegal activities and fraudulent transactions, schemes of financial pyramids, thereby helping to remove unscrupulous organizations from the market and protect the interests of consumers," said Nurlan Abdrakhmanov ...

   With regard to the existing organizations of the microfinance market that did not apply to  The Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market for a license within the prescribed period, or which were denied a license, measures will be taken for compulsory reorganization or liquidation in court.

   The register of organizations licensed to carry out microfinance activities is posted on the official website of  The Agency of the Republic of Kazakhstan for Regulation and Development of Financial Market.

 

More details: https://kapital.kz/finance/94739/v-kazakhstane-po-litsenzii-rabotayut-542-lombarda.html

 


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