Foreign currency loans issued to the public experienced an uptick for the first time in a prolonged period.
Revamped Report on Kazakhstan's Loan Volume
It's crystal clear that by April 1, 2025, the economic scene was awash with loans to the tune of a whopping 42.8 trillion tenge. This figure represents a substantial 20.4% increase compared to the previous year and a more modest 2.2% growth since the year's beginning, as per the National Bank of Kazakhstan's statistics.
Breaking down the dough, 45.6% of the total, roughly 19.5 trillion tenge, went to businesses (including non-financial legal entities and individual entrepreneurs), while the remaining 54.4%, or almost 23.3 trillion tenge, found its way into the pockets of hardworking citizens. Over the month, the business sector witnessed a 1.6% increase in loans, while the populace saw a 1.4% rise.
As for the currency exchange, 90.6% of the loans were issued in national currency, equating to 38.7 trillion tenge. Foreign currency loans amounted to 4 trillion tenge, accounting for 9.4% of the total. Surprisingly, foreign currency loans shot up by 3.7% after experiencing a decline in the previous two months, largely due to a surge in business loans. For the first time this year, the populace's loans in foreign currency also saw a slight increase, following a steady decrease since October 2024.
Loan Categories for the Economic Mix
Typically, the lion's share (85.6%) of loans flowed to the banking sector, which now stands at a hefty 36.6 trillion tenge. On the other hand, loan categories beyond the banking sector have experienced exclusive growth, thanks to organizations involved in microfinance activities (+3% to 2.9 trillion tenge).
mortgage loans saw a 0.5% dip (271 billion tenge), while loans from other quasi-governmental sector entities experienced a 0.4% decrease (2.9 trillion tenge).
Previously, our website provided insights on the volume of loans issued to the general populace during the first quarter of the year, as well as the most popular credit products in the market.
Enrichment Insights:
- Interbank Loans and Deposits: The National Bank of Kazakhstan oversees transactions in national currency, USD, and EUR.
- SMEs and Business Loans: Programs like "Business Roadmap 2025" (BRM 2025) provide substantial support to SMEs through concessional lending, loan guarantees, and interest rate subsidies. They particularly focus on non-extracting sectors and rural areas.
- Microfinance: This sector, driven by government initiatives, is a major force behind expanding access to finance for both SMEs and the general population. The Damu Entrepreneurship Development Fund plays a significant role in this area.
I, as an individual investor, am keenly interested in the growth patterns of the loans within the business sector, with a particular focus on foreign currency loans. The increase in foreign currency loans, despite a decline in the previous two months, is intriguing, especially given its impact on businesses.
In light of the report, I am contemplating allocating a portion of my finance portfolio towards microfinance activities, given the exclusive growth experienced by this sector and the government's emphasis on expanding access to finance for SMEs and the general population.
