Government to repay loans of vulnerable social groups in Kazakhstan

NUR-SULTAN. KAZINFORM - The government will repay loans up to KZT 300,000 provided to vulnerable social groups, President of Kazakhstan Kassym-Jomart Tokayev announced while making a speech at the Akorda Presidential Residence on the occasion of the upcoming professional holiday of media workers, Kazinform correspondent reports.

"A situation has arisen where the most vulnerable citizens for various reasons found themselves in a difficult situation and are unable to service their loans. The debt burden of many citizens is on the rise; their real incomes are declining. People do not know how to pay off their loan debts, and this problem affects the vital interests of around 100,000 of our citizens," said Kassym-Jomart Tokayev.

The President revealed that more than 86% of the loans are no larger than 1 million tenges. The average amount of debt is about KZT 300,000.

"This has been all analyzed and estimated. As the Head of State of Kazakhstan, I, of course, cannot stand aloof, seeing that people are not able to climb out of the debt pit. Therefore, I instructed the Government to take the following one-time measures: as a direct and targeted financial assistance for each borrower relating to the categories of citizens mentioned by me, the government will repay the principal amount of the debt and the interest charged totaling up to 300,000 tenges to the second-tier banks and their microfinance organizations," said Kassym-Jomart Tokayev.

Alongside this, according to him, the measure shall not apply to the debts exceeding KZT 3 million as of June 1 of this year.

"For more than 55% of borrowers, that is, for 550,000 people, this means complete repayment of debts. As for the rest of the citizens, part of the debt, in the amount of 300,000 tenges, will be repaid. This will be considerable support for them in restoring solvency and reducing the debt burden. For all the citizens who have got unsecured loans from banks and microfinance organizations, the penalties charged as of July 1 of this year will be written off.

This measure, that is, the write-off of loans, will be primarily made at the expense of second-tier banks and microfinance organizations. Also, we enact a ban on penalties, fees, and other charges related to the disbursement and servicing of loans for all unsecured consumption loans of individuals with overdue indebtedness of more than 90 days," Kassym-Jomart Tokayev concluded.