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THE DEVELOPMENT TRENDS IN CONSUMER CREDITING IN KAZAKHSTAN (ON THE BASIS OF JSC “ATF BANK”)

THE DEVELOPMENT TRENDS IN CONSUMER CREDITING IN KAZAKHSTAN (ON THE BASIS OF JSC “ATF BANK”)
Земфира Алямова, старший преподаватель, кандидат экономических наук

Жумагуль Макашева , доцент, кандидат экономических наук

Гулистан Ахметова, старший преподаватель, кандидат экономических наук

Актюбинский государственный университет им.К.Жубанова, Казахстан

Участник конференции

The credit policy is directed not only at the highest lending profit, but also on the maximum reduction of credit risk. Due to the balanced and conservative credit policy, the professional work of the staff, improvement of the mechanism of decision-making procedures and risk - monitoring the effectiveness of credit operations is constantly growing. Good knowledge of the loan debtors, the importance of funded projects in the development of priority branch of the economy of Kazakhstan and their payback on investment, reliability and high liquidity of the proposed creditsecurity contribute much to it.

Keywords: credit extension, credit portfolio, credit policy, credit profit, rate of credit.

 

Among the traditional banking credit extension is a basic operation, providing the stability and profitability of the existence of banks. By originating credit to physical and judicial persons, the bank creates its credit portfolio.

Crediting continues to be one of the main activities of JSC “ATF Bank”, because of its high yield. However, the credit policy is directed not only at the highest lending profit, but also on the maximum reduction of credit risk. Due to the balanced and conservative credit policy, the professional work of the staff, improvement of the mechanism of decision-making procedures and risk - monitoring the effectiveness of credit operations is constantly growing. Good knowledge of the loan debtors, the importance of funded projects in the development of priority branch of the economy of Kazakhstan and their payback on investment, reliability and high liquidity of the proposed creditsecurity contribute much to it.

Industrial enterprises, agricultural producers, trading companies, government organizations and private individuals are the main loan debtors.

On December 31, 2012 the volume of credits granted by second-tier banks, was 9,902,445,000 thousand tenge, which is by 30.76% more in comparison with the same date in 2010. The rapid development of the crediting that we see in the Republic of Kazakhstan is a boom in demand for getting credits to the public, which is evidenced by the growth rate of credits 36.23% to physical persons. (see Table 1).

Table 1.

The structure of loans by second-tier banks of Kazakhstan

 

2010

2011

2012

Variance

Thousands tenge

%

Thousands tenge

 %

Thousands tenge

 %

Thousands tenge

%

Credits granted to juridical persons

5 459 115  

72,1

6 451 499  

73,4

7 022 752  

70,9

1 563 637  

28,7

Creditsgranted to physical persons

2 113 814  

27,9

2 341 709  

26,6

2 879 693  

29,1

765 879  

36,2

Credits
Total

7 572 930  

100

8 793 207  

100

9 902 445  

100

2 329 515  

30,8

Taken together all credits given to retail customers is 2.5 times less than the total credit portfolio given to small and medium businesses. Absolute increase of the volume of credit portfolio of physical persons is 7, 6% ahead of the same indicator for juridical persons. As a result, the share of crediting to physical persons in the dynamics of credit debt increased to 29, 08%. The main driving force growth in the credit portfolio of banks in Kazakhstan is the loans to juridical persons. This is due to the fact that credits, including representatives of large, medium and small businesses are in demand. Kazakhstan has created favorable conditions for strengthening the position of local entrepreneurs, each year the President in his letters emphasizes the creation of favorable and attractive conditions for businessmen of large, medium and small businesses.[1]

Thus, from the conducted analysis we see that the credit portfolio of second-tier banks increases every year, due to the fact that there is a growth in credits granted to both juridical and physical persons. The increase in demand for consumer credits was mainly due to no-purpose loans drawn directly into the points of sale. Kazakhstan's economy is developing, and therefore people can take credit for expensive purchases.

Let’s see the classification of loans in Aktobe region (see Table 2).

Table 2.

The structure of loans by types of customers in Aktobe region.

 

2010

2011

2012

Variance

Thousands tenge

%

Thousands tenge

%

Thousands tenge

 %

Thousands tenge

%

Credits granted to juridical persons

70 280  

46,1

104 176  

53,2

107 716  

49

37 436  

53,3

Creditsgranted to physical persons

82 199  

53,9

91 772  

46,8

112 202  

51

30 003  

36,5

Credits
Total

152 479  

100

195 948  

100

219 918  

100

67 439  

44,22

According to the results of 2012 the amount of credits granted by second-tier banks in Aktobe region was 219,918,000 tg, which is 44.22% more in comparison with the same date in 2010. Credits to individuals dominate in the structure of the credit portfolio. On December 31, 2012 credits to retail customers amounted to 112,202,000 tg., which is 36.5% higher compared with 2010. The increase was due to the fact that the demand for consumer loans among the population increases. Banks, in turn, hold active credit policy to attract customers by conducting a variety of events. They constantly revise credit terms, namely interest rates, credit periods. For operation banks attract experienced and qualified professionals who will be able to find an approach to each client.

Let’s analyze the credit portfolio of JSC “ATF Bank”for the period from December 31, 2010 to December 31, 2012. In 2012, there was a reduction in credits to customers by 84,105,440 thousands tenge or by 8.9% compared with 2010 is due to the decrease in the amount of credits granted to juridical person. However, there is a growth of credits to given to physical persons. The increase in retail credits was due to the fact that the demand for consumer loans and auto loans among the population has increased. The Bank actively holds credit policy to attract customers, participants of salary projects, offering them for special favorable conditions for consumer loans. Negative dynamics of credits given to juridical persons connected with the growth of incomes of the enterprises. The increase in current accounts and demand deposits of corporate clients in the JSC “ATF Bank”is the proof of this. [2]

Table 3 shows that in 2012 the JSC “ATF Bank”increased the amount of provision for impairment by 28.41%, compared with 2010, and it was 275,477,702 thousands tenge. The reason is that problem credits make up a large portion (over 40%) in the structure of the loan portfolio of the bank. By increasing the amount of the reserve, the bank insures itself against losses on non-payment of loans.

Table 3.

The amount of credits and provision of JSC “ATF Bank”, thousands tenge

 

2010

2011

2012

Variance

relative amount

total

Credits issued to customers before deduction of impairment provision

944 953 387

953 110 834

860 847 947

-84 105 440

-8,9%

Impairment provision

(214 518 368)

(260 915 747)

(275 477 702)

60 959 334

28,41%

Credits to customers, with the deduction of impairment provision

730 435 019

692 195 087

585 370 245

-145 064 774

-19,86%

As a part of the credit portfolio of JSC “ATF Bank” for the period from 2010 to 2012 a significant share of credits is made by juridical persons, they represent more than 80% of the total loan portfolio, and the rest - loans extended to physical persons. In 2012, in the structure of credits according to the types of JSC “ATF Bank” customers there was a rise of retail customers by 2.11%, compared with 2011. The increase was due to the increase in consumer loans and loans to buy cars.

As a part of the structure of credits granted to physical persons for the period from 2010 to 2012, the main part was made up by mortgage loans (over 50%), consumer loans (over 40%), and the rest of it, a small proportion were loans to buy cars. There was a decline in mortgage loans, the main reason of which is that the JSC “ATF Bank” has tightened credit conditions. In particular, the initial payment was increased from 15% to 20%, as also the necessary condition of the mortgage loan was a mortgage real estate and creditor’s life insurance. The growth of consumer loans was due to the fact that the bank has cut interest rates on this type of loan, and put special favorable conditions for salary projects.

“ATF Bank” credits for the analyzed year were granted for various purposes, for the main sectors of the economy such as construction, wholesale trade, transportation, food industry, etc. From the above analysis of the credit portfolio of JSC “ATF Bank”, it is clear that every year the volume of loans issued decreased, mainly due to the reduced volume of loans granted to judicial persons. In the analyzed period, the loans issued to physical person increased. Every year the bank increases the reserve for impairment, insuring itself against possible losses on non-payment of loans.

It can be concluded that the bank carries out a structured credit policy that focuses on an individual approach to each client. The Bank regularly reviews credit conditions, namely interest rates, loan periods for retail loans. During 2010 - 2012, there has been growth in consumer loans and car loans. The increase in consumer loans was due to the fact that at the present time the Republic of Kazakhstan has seen a boom in consumer credit. Credit products on retail loans are constantly improved by the bank. For today customers of the bank can buy household appliances, furniture in installments directly in the points of sales without referring to the bank branch. Every year the number of partners of JSC “ATF” is increased among tour operators, travel agencies, fitness clubs, and the wholesale and retail trade.

Summing up, it can be noted that for decades the most part of the population of our country enjoys the benefits of civilization - real estate, cars - in installments and this has much advantages, both for lenders and for their customers. Banks have a long-term stable income: as a percentage of compensation. The greater volume of market earned by the bank has significant income. The consumer gets the opportunity to enjoy expensive things for which he at another scenario would save money for ten - twenty years. Although it is not free: the credit will have to be paid but the most people can have high living standard now.

 

References:

  1. www.nbrk.kz – the official website of National Bank of the Republic of Kazakhstan
  2. www.atf.kz – the official website of JSC “ATF Bank”
Комментарии: 4

Расулова Саодат

Работа интересная и заслуживает положительной оценки.

Алване Хассан

Интересная работа. Четко виден личный творческий вклад автора в исследуемые проблемы. Успехов в дальнейших исследованиях!

Романович Людмила Геннадьевна

Тема работы актуальна. Автором представлен анализ проблемы без указания литературных источников, а лишь интернет-сайтов, что является недостатком работы.

Зульфугарзаде Теймур Эльдарович

Отраслевые проблемы кредитования, рассмотренные автором, представляют значимость для современной науки в целом и способствуют совершенствованию порядка и правил осуществления банковских операций применительно к теме проведенного исследования. Работа заслуживает высокой положительной оценки.
Комментарии: 4

Расулова Саодат

Работа интересная и заслуживает положительной оценки.

Алване Хассан

Интересная работа. Четко виден личный творческий вклад автора в исследуемые проблемы. Успехов в дальнейших исследованиях!

Романович Людмила Геннадьевна

Тема работы актуальна. Автором представлен анализ проблемы без указания литературных источников, а лишь интернет-сайтов, что является недостатком работы.

Зульфугарзаде Теймур Эльдарович

Отраслевые проблемы кредитования, рассмотренные автором, представляют значимость для современной науки в целом и способствуют совершенствованию порядка и правил осуществления банковских операций применительно к теме проведенного исследования. Работа заслуживает высокой положительной оценки.
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