"Assistance is required to aid our citizens in escaping the cycle of debt" - Tokayev (rephrased)
In a significant move to bolster the nation's financial sector, particularly among the younger generation, President Kasym-Jomart Tokayev has called for a strengthened financial education system and a crackdown on fraudulent loan schemes. This comes as consumer lending in the country has seen a rapid 33% increase last year, with the number of problem borrowers exceeding 1.5 million.
Addressing business representatives at a meeting on the sidelines of the Investment Forum in Astana, President Tokayev expressed his support for honest entrepreneurs who invest in production and create permanent jobs. He also urged financial institutions to pay attention to loans obtained through fraudulent schemes.
To combat fraudulent loan schemes, Kazakhstan has implemented several measures and initiatives. Joint liability for banks and mobile operators in internet fraud cases has been announced, with the aim of enhancing prevention and timely detection of fraud attempts, particularly online scams and telephone frauds. An anti-fraud center at the National Bank, established recently, plays a central role in detecting and blocking suspicious transactions associated with scams such as fake investment platforms and misuse of bank cards.
In addition, new caps on loan interest rates have been introduced to protect consumers from usurious lending conditions, which often exacerbate problems for borrowers facing repayment difficulties. The government is also supporting vulnerable borrowers via social protection reforms, integrating systems such as targeted household benefit programs to assist poorer households vulnerable to financial shocks.
Moreover, Kazakhstan is strengthening data security protocols to reduce identity theft and fraud-related loan schemes, following a significant personal data breach impacting over 16 million citizens.
President Tokayev noted that the reforms happening in the country in the political and socio-economic spheres are unprecedented in the region. He emphasised that these reforms would not be possible without the support of the people and that the issue of helping citizens get out of debt traps is an important political issue.
The business community has mainly supported Kazakhstan's strategy aimed at strengthening its economic potential. The dialogue between the President and business representatives was open and productive, with the President appreciating the patriotic stance and desire of the business community to benefit the state.
In conclusion, Kazakhstan's current strategy combines stricter regulatory liability on financial and telecom entities, enhanced anti-fraud detection infrastructure, interest rate caps to protect borrowers, and expanded social safety nets to support vulnerable populations facing loan repayment challenges. These integrated efforts aim to reduce the incidence of fraudulent loans while providing relief and protection for problem borrowers.
- The government is advocating for stronger personal-finance education to safeguard the nation's younger generation, putting increased focus on this area to prevent them from falling victim to fraudulent loan schemes.
- Recognising the significant role of financial institutions in addressing fraudulent loan practices, President Tokayev has urged these institutions to be vigilant about loans obtained through such schemes.
- In addition to tackling fraud, the government is also implementing policies and legislations to protect consumers from harsh lending conditions by introducing new interest rate caps and expanding social safety nets.
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