MFO: Risk of exit from the market

More than two thousand micro-credi.organizations have not passed accounting registration in the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan.

In the Association of Microfinance Organizations in Kazakhstan it is said that that excessive control will shift bona fide firms behind the scene.

"At present, the regulator has taken enough measures to prevent microfinanc.organizations from issuing loans to those who cannot repay them. This is how the mechanism for calculating the borrower's debt load ratio and other regulatory restrictions work. Excessive tightening of legislation in this area may lead to a narrowing of the legal and regulated sector of microfinanc.organizations and expansion of the shadow loan facilities market. Therefore, we hope for an adequate application of regulatory measures, without rigid exaggerations" - said Yerbol Omarkhanov, Director of the Association of Microfinance Organizations of Kazakhstan.

Microfinanc.organizations are not the main reason for the growth of unsecured consumer lending, according to this specialized Association.

Note that traditional players in this market mainly provide loans to small and medium enterprises. According to statistics, their share in the total loan portfolio is only 2 percent.

Earlier it was reported that from September, companies that did not pass registration will be sued in the courts for their forced liquidation.