Small banks to be enlarged or converted into credit unions and MFIs - National Bank

Almaty. April 15. KazTAG - Consolidation of small banks or their conversion into credit unions, microfinance institutions (MFIs ) is expected in Kazakhstan, reads  the draft concept for the development of the financial sector of Kazakhstan until 2030.

" There is no plan of forceful cutback of small banks or limitation of the total number of banks, but the regulatory system will focus on consolidation of small banks or their conversion to other forms of credit institutions ( credit unions , MFIs ) . In particular , the system of refinancing of the National Bank will assume operations only with large and medium-sized banks that will be implemented within the system of primary dealers of securities market ", reads the statement of the National Bank.

As noted, the National Bank estimates show that the market share of the banks is an indicator of the efficiency of its operation, including profitability.

" This requires strengthening of trend for further consolidation of the sector. In order to limit excessive concentration the focus will be made on development of group of medium sized banks and not large system banks. The group of medium-sized banks should be presented by 15-20 financial institutions with domestic capital, and subsidiaries of foreign banks ", reads the message.