Kazakhstanis Trapped in Debt: Violations Found Among MFIs
Photo: Elements.envato.com, ill. purposes
The Financial Monitoring Agency (FMA) has uncovered serious violations committed by six microfinance organizations (MFIs), which allegedly drove thousands of Kazakhstanis into debt bondage, forcing them to repay loans several times over, Orda.kz reports.
According to the Agency, an investigation is underway in Almaty into fraud and illegal business practices involving the leadership of the following MFIs:
- Creditum
- Sofi Finance
- Hava Finance
- SF Offline
- POS Credit
- Salem Credit
The FMA revealed that these companies targeted clients with overdue loans, coercing them into signing guarantee agreements with affiliated firms via three online platforms.
Under these agreements, the guarantor would only cover the debt in the event of the borrower’s death.
“For this so-called 'service,' borrowers were charged fees many times greater than their original loan amount — effectively locking them in a debt trap,” the agency stated. “In many cases, borrowers ended up paying three to five times more than they initially owed.”
In one example, a client with a 120,000 tenge overdue loan ended up transferring 446 thousand tenge to the MFI under a fictitious "guarantee" (not counting the principal debt and interest).
These practices became the main source of profit for the six MFIs, generating around 30 billion tenge in illegal earnings, according to investigators.
In early March, Kazakhstan introduced new regulations for collection agencies, aiming to curb abusive practices in the financial sector.
Original Author: Nikita Drobny
Latest news
- Toqayev Meets Croatian Foreign Minister
- Ukraine: Peace Talks Fall Through In London
- Russia Opposes Western Dominance in Central Asia, Calls for Equal Cooperation - Lavrov
- Prosecutor's Office Employee Alleges Tampering, Probe Finds No Evidence
- Powerful Earthquake Shakes Türkiye
- $140 Million in Contracts: Kazakhmys, Kazatomprom, and ERG Eye Opportunities in Afghanistan
- Mirziyoyev to Meet Lavrov and Berdimuhamedow in Samarqand
- Shymkent Official Comments on Deputy Akim Shooting, Dismisses Motive Rumors
- Case Against Ex-Finpol Official Ulan Madiyev Assigned to Aizhan Kulbayeva
- Anonymous Channels: Time to Hold Talks with Telegram – Culture Minister
- Four Individuals Detained in Osh for Alleged Mercenary Recruitment for War in Ukraine
- Minister Comments on Recruitment Ads for Ukraine War Circulating Online
- Two Justice Ministry Employees to Testify in Beketayev Case
- Orda Investigates Alabuga Start Program
- Verdict Handed Down in Zangar Khasenov Assassination Attempt Case
- Italian Prime Minister Postpones Visit to Kazakhstan, Pope's Passing Cited as Reason
- Toqayev Congratulates Kazakhstanis on First National Book Day
- Kazakhstan to Explore Kokzhide for Drinking Water Supply to Western Regions
- Janaozen Gas Plant Project: Bektenov Urges Oversight amid Delays
- Russia Lifts Ban on Kazakhstan's Agricultural Imports Imposed in 2024
