The Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan set out, at a Government meeting, the supervisory and prudential measures it has taken to support annual growth in lending to the real economy, including lower liquidity and stable funding coefficients, reduced risk weights for small and medium-sized enterprise (SME) exposures, and a long-term funding mechanism developed jointly with the National Bank. In 2024, reduced values of the liquidity coefficient under “Standard 1” were set at 0.9, which the agency said released KZT 1.6 trillion of bank liquidity and left an estimated “free liquidity reserve” of around KZT 6.0 trillion out of total liquid assets of KZT 19.2 trillion. With client deposits accounting for close to 80% of liabilities, the stable funding coefficient was also reduced to 0.9 in 2024. To extend long-term credit for investment projects, banks issue 7-year bonds at market rates under the new mechanism, with planned financing of KZT 500 billion; banks have attracted KZT 220 billion to finance 72 projects in manufacturing, electricity supply and transport. For SME lending, the risk weight was reduced from 100% to 50%, which the agency said increased banks’ capital capacity for new SME lending by more than KZT 1.5 trillion, alongside simplified credit assessment for loans of up to KZT 500 million and eased requirements to reconcile borrowers’ financial and tax reporting. Digitisation measures included integrating banks’ information systems with 52 government services in 2023-2024, and the agency reported that unsecured business lending grew 35% in 2024 to KZT 3.7 trillion, representing 21% of total business lending. Further steps referenced include work to attract foreign-currency bond funding and a planned reduction in risk weighting for foreign-currency corporate loans from 200% to 100%. The agency also expects integration with 19 additional state databases to be completed in 2025, including services covering legal entities, tax reporting, electronic invoices, acts of completed work and real estate transactions.
Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan 2025-03-04
Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan outlines prudential easing and 7-year bank bond funding to expand real-economy lending
The Agency for Regulation and Development of the Financial Market of Kazakhstan plans to boost real economy lending by reducing liquidity and stable funding coefficients and introducing a new long-term funding mechanism with the National Bank. Key initiatives include reducing SME risk weights from 100% to 50%, simplifying credit assessments, and integrating bank systems with government services. The agency also aims to lower risk weights for foreign-currency corporate loans and expand integration with state databases by 2025.