Kazakhstan Sets New Caps on Annual Effective Interest Rates

Kazakhstan’s financial regulators have introduced new limits on the annual effective interest rates (AEIR) for various types of loans and microloans, aimed at enhancing consumer protection and promoting greater transparency in lending practices.

This critical update stems from a joint resolution passed by the Agency for Regulation and Development of the Financial Market of the Republic of Kazakhstan (Resolution No. 13, dated April 30, 2025) and the Board of the National Bank of Kazakhstan (Resolution No. 27, dated May 22, 2025). The resolution will come into effect starting June 16, 2025.

Key Interest Rate Limits Introduced

The newly approved regulatory framework establishes the following maximum thresholds for the annual effective interest rates:

• Unsecured Bank Loans: Capped at 46% AEIR
• Secured Bank Loans (with collateral): Limited to 35% AEIR
• Mortgage Housing Loans: Not to exceed 20% AEIR
• Microloans from Microfinance Organizations (MFOs): Capped at 46% AEIR
• Short-Term Microloans (up to 45 calendar days):

– For amounts up to 45 times the Monthly Calculation Index (MCI), the AEIR must be less than 0.3% per day

– And must not exceed 179% per annum

These limits are set to improve affordability and reduce the burden of excessive debt among borrowers, especially within the rapidly expanding microfinance segment.

Compliance Requirements and Legal Framework

To qualify for these rates, microloans must comply with the provisions outlined in the National Bank’s regulation: “On the Procedure for Concluding a Microloan Agreement”. This includes detailed requirements for:

• Clear and upfront disclosure of the total cost of the loan (including overpayment and loan purpose)
• Transparent and standardized formatting for loan agreements and repayment schedules
• Mandatory presentation of key terms on the first page of the contract

Moreover, at the time of signing a loan or microloan agreement, or when modifying interest rates or fees, the AEIR must strictly remain within the newly set caps.

Implications for the Financial Sector

These changes reflect a broader effort by Kazakhstan’s authorities to align lending practices with best international standards. They are expected to:

• Encourage responsible lending
• Improve consumer confidence
• Enhance market discipline across banking and microfinance institutions

FChain Kazakhstan continues to monitor and analyze regulatory developments affecting financial services. For businesses and financial institutions operating in the region, understanding and adapting to these changes will be key to maintaining compliance and competitive advantage.

Article prepared by:
Ekaterina Kassumova, Director of FChain Kazakhstan
June 9, 2024