Kazakhstan tightens oversight of bank lending with permanent DSR checks

Kazakhstan is tightening oversight of bank lending. The Agency for Regulation and Development of the Financial Market is launching a permanent supervisory process called DSR. Specialists will check how correctly banks assess clients' solvency, taking into account their real incomes and obligations. The main goal is to prevent excessive household indebtedness and situations where loan payments become unbearable.

The new mechanism will cover 11 large second-tier banks. It follows a pilot project in which specialists analysed the calculation of the debt burden ratio in eight banks and found differences in approaches. Chief specialist Anel Tolkynbekova said particular attention will be paid to the reliability of borrowers' income assessments, the completeness of recording their credit obligations and compliance with requirements.

In September, unsecured consumer lending fell 7.6% year on year, yet Kazakhstanis took out new loans worth more than 1 trillion tenge. By October 1, the household loan portfolio had approached 27 trillion tenge, up more than 7.5% since the start of the year. Economist Andrey Chebotarev said banks themselves have an interest in assessing borrowers' solvency. Experts say tighter control may affect the availability of consumer loans, but the regulator's aim is to prevent unmanageable debt, not to restrict lending.