In order to protect the rights of borrowers, the provisions of the Law ‘On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Public Administration Issues, Improving the Collateral Policy of Second-Tier Banks, Regulation of Valuation Activities and Enforcement Proceedings’, adopted on December 31.2021 (hereinafter referred to as the Law) are being implemented.

1. To prevent the growth of overdue debts of citizens on unsecured consumer loans and microcredits, under agreements drawn up from July 1, 2022, a ban on accrual of remuneration after 90 days of delay in repaying the loan is introduced. This rule does not apply to unsecured loans issued to individuals as individual entrepreneurs. Recall that now a similar ban applies to mortgage loans to individuals.
2. Strengthened measures to protect the interests of secured borrowers.

Amendments have been introduced to the law on banks and banking activity, according to which the mortgagor, regardless of whether he is an individual or a legal entity, has the right to replace the collateral if the amount of outstanding mortgage loan obligations is less than 10% of the value of collateral.

In addition, mortgaged borrowers are granted the right to independent judicial or extrajudicial realization of a mortgage – a dwelling within a three-month period. To prevent the sale of housing at a reduced cost at auction and ensure the sufficiency of money received from the out-of-court sale of collateral at auction to pay off outstanding obligations on mortgage loans, the lower threshold for the sale price of collateral has been increased from 50% to 75% of the initial assessed value of the collateral.  

In order to prevent unfair actions on the part of creditors, a ban on participation in the auction of the pledgee, his employees, affiliates, as well as subsidiaries has been introduced.

3. Additional restrictions have been introduced on the sale of mortgaged housing on citizens’ loans. According to the amendments, if the amount of the outstanding obligation on a mortgage loan does not exceed 15% and the delay period is not more than 6 months, then the lender is not entitled to collect collateral in the form of housing.   

The conditions for writing off blank balances on mortgage housing loans have also been expanded. This measure will allow borrowers, who have no other property and incomes that do not exceed twice the minimum wage, to write off the debt left after the judicial sale of mortgaged housing.