Kazakhs bore into microcredits amid shortage of tenge in banks21 march 2015, 17:00
Kazakhstani banks are experiencing tenge shortages because many of their clients have been transferring their tenge deposits into dollars-denominated ones after the February 2014 devaluation of the national currency.
Director of the Association of Microfinance Organizations of Kazakhstan Anatoly Glukhov believes that the present situation - high devaluation expectations - makes Kazakhstanis opt for services of microcredit organizations, Tengrinews reports.
Glukhov pointed out that borrowing from microcredit organisations had markedly increased. The fact that banks have tougher requirements towards borrowers' creditworthiness and collateral than microcredit organizations adds to the existing conditions. No wonder that interest rates in microcredit organizations are higher than in banks - they start at 15 and reach as high as 45 percent.
Glukhov insisted that the deficit of the tenge was only temporary. "There should be a joint meeting of the government and the National Bank of Kazakhstan, where, I think, the decisions on how to remedy the present situation will be made," Glukhov said about the meeting that took place in mid February. However, no dramatic improvements have taken place since then.
Not everything may be so easy for the microcredit organisations either. Chairman of MCO KazMicroFinance LLC (KMF) Shalkar Zhusupov said that his organization did not expect a large inflow of customers because the problems that had affected the banks would affect microfinance institutions as well. "It all depends on how the situation will unfold in the next 2 or 3 months," he said.
KMF accounts for 60 percent of all the microcredits issued in Kazakhstan. According to the website of the organization, its 17 years of operation established KMF as one of the leaders in Central Asian microfinance sector. It is also the largest microfinance organization in Kazakhstan with a loan portfolio of over 27 billion tenge ($146 million) and over 130,000 active clients.
On January 30 KMF was re-registratered from microcredit to microfinance institution (MFI) and is now subject to the regulation of the National Bank of Kazakhstan. In the long run KMF plans to become a bank.
Until the end of 2015 all the microcredit organisations in Kazakhstan must assume the status of microfinance organization. According to Glukhov, re-registration of other microcredit organizations into MFIs is expected in the second or third quarter of this year.
Reporting by Azhar Ashirova, writing by Dinara Urazova, editing by Tatyana Kuzmina