Astana, November 6. The National Bank has extended the exemptions from the debt-burden ratio (DBR) requirements: for loans under the housing construction savings system they will apply until December 31, 2029, and for three types of car loans until December 31, 2027, the regulator said.
The exemptions cover three types of car loans: for a new car that is registered in Kazakhstan for the first time and remains as collateral for the loan; for a used car with a down payment of at least 50% of its value; and for a car up to three years old with a down payment of at least 30%. What will happen to other car loans is not stated in the announcement.
On November 5 the regulator announced that the DBR for car loans was being postponed by a year and for housing savings by two years, but gave no dates. Now the dates are named: the deadline for car loans matches the calculation we made that day, the end of 2027. For housing savings the date is December 31, 2029; the announcement does not say what the earlier deadline was, so it cannot be compared with the “two years” named on November 5.
The National Bank does not give reasons for the extension. It has explained the regulator’s caution before: on July 24 National Bank Chairman Timur Suleimenov said that the car loan portfolio had grown by about 60% in three years and that the share of stage-three, that is problem, loans was 5.7%, Zakon.kz reported. At the time the Ministry of Industry and Construction proposed abolishing the DBR for car loans altogether to make cars more affordable.
What it means: The postponement the regulator announced on November 5 now has specific dates. However, the exemption from the DBR applies only to the listed types of car loans: it is tied to the condition of the car and the size of the down payment, while for housing savings it applies to the whole system.
Who benefits: Borrowers whose monthly loan payments, with the new loan, would exceed half of their income, but who take a car on the named terms or a loan under the housing savings system. The car market: the Ministry of Industry and Construction sought a softer rule so that cars become more affordable. The risk of problem loans remains: the regulator has already noticed such car loans.
Background: The debt-burden ratio is the ratio of a person’s monthly payments on all loans, including the new one, to average monthly income; under the current rules the limit is 50%. A down payment is the part of a car’s price the borrower pays from their own money rather than borrowing: the larger it is, the lower the bank’s risk, because the car itself remains as collateral. The housing construction savings system is a savings scheme in which a person saves for a home and then receives a loan on preferential terms.
We have also reported on how the National Bank postponed the DBR for car loans by a year and for housing savings by two.
