Kazakhstan’s Central Bank Governor criticizing those taking consumer loans

Kazakhstan’s Central Bank Governor Gregory Marchenko has criticized those buying expensive smartphones and plasma TVsets on credit with no thought to their solvency, Tengrinews.kz reports. According to recent research in Kazakhstan and Russia, 20-25% of those taking consumer loans are reluctant to pay off from the outset, he said. Mr. Marchenko noted that he hadn’t seen any substantial progress in terms of general public’s financial awareness. “There is an illusion of being able to earn extra money in a magic way (…) People tend to overestimate their earning abilities (…) The Central Bank urges people to soberly estimate their capacities and to realize that interest rates on consumer loans are pretty high”, he elaborated. According to Mr. Marchenko, back in 2006 a third of all the expensive smartphones available on the market were purchased on credit. “People could buy cheaper phones within their budget so that not to be in the red (…) In some cases it’s like a bondage to banks: a sizeable part of family income goes to pay off the high interest on consumer loans. And the reason is (…) to purchase a big plasma TV or some other consumer goods that people could do without (…)”, he said.

Kazakhstan’s Central Bank Governor Gregory Marchenko has criticized those buying expensive smartphones and plasma TVsets on credit with no thought to their solvency, Tengrinews.kz reports. According to recent research in Kazakhstan and Russia, 20-25% of those taking consumer loans are reluctant to pay off from the outset, he said. Mr. Marchenko noted that he hadn’t seen any substantial progress in terms of general public’s financial awareness. “There is an illusion of being able to earn extra money in a magic way (…) People tend to overestimate their earning abilities (…) The Central Bank urges people to soberly estimate their capacities and to realize that interest rates on consumer loans are pretty high”, he elaborated. According to Mr. Marchenko, back in 2006 a third of all the expensive smartphones available on the market were purchased on credit. “People could buy cheaper phones within their budget so that not to be in the red (…) In some cases it’s like a bondage to banks: a sizeable part of family income goes to pay off the high interest on consumer loans. And the reason is (…) to purchase a big plasma TV or some other consumer goods that people could do without (…)”, he said.

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