Number of Loans Distributed to the Public in First Quarter: Trillion-ten-ten-ten Account Detail
New and Improved Take:
It's clear as day that the first quarter of '25 saw a significant lending surge, with a whopping 4 trillion tenge worth of loans issued to the population. While the nominal growth compared to the previous year was a beefy 6.7%, the real deal is that it dropped by a concerning 2.4% in actual terms, according to First Credit Bureau's study.
Moreover, there's a downward trend in the number of loans given out – a 4.1% decrease compared to the same time last year, marking the third consecutive quarter of descent. A slight increase in the number of borrowers (1.3%) might seem reassuring, but they totaled 4.5 million by Q1's end.
Loan Breakdown
The majority of the loan volume was for unsecured consumer loans, with a hefty 2.6 trillion tenge doled out to Kazakhs in the first quarter. Although the nominal numbers rose by 5.4%, inflation rates were even higher, resulting in a 3.7% real decrease compared to the same months in '24. Unfortunately, this unfortunate trend continues, as analysts at PPCB have reported a real year-on-year downturn for the third quarter in a row, despite regulatory measures aimed at the consumer credit sector.
A deeper dive into the data reveals that unsecured consumer loan sizes vary significantly among borrowers. For example, small borrowers' loans didn't surpass 37K tenge per quarter, while large borrowers began at approximately 1.5 million tenge. The averages sway between 22K tenge and 3.2 million tenge respectively, indicating a massive 142-fold difference.
Meanwhile, the volume of mortgage lending amounted to 466.4 billion tenge, recording a 5.1% increase compared to the same quarter last year. Nevertheless, the number of disbursements dropped by 7.2%, with a year-on-year decrease of 5.8% in the number of borrowers. This means an average mortgage of 18 million tenge per quarter was taken out by one borrower, marking a 11.6% hike compared to the previous year's first quarter.
Interestingly, 10% of small mortgage borrowers took no more than 6.7 million tenge, averaging 4.4 million; 10% of large borrowers borrowed at least 31.5 million, averaging 46.7 million tenge. As a result, the top 10% of large borrowers approved approximately the same amount as the bottom 50% of the smaller ones combined.
Last but not least, auto loans totaled 481.7 billion tenge, experiencing a 19.2% year-on-year increase. However, adjusted for overall consumer inflation, the positive dynamics slowed down to half, to 9%, as noted in the study. The number of auto loan disbursements increased by 13.1% year-on-year, while the number of borrowers grew 9.4%, reaching 54.8k. The average auto loan per borrower was 8.8 million tenge, inching up nominally by 9% but decreasing by 0.4% in real terms compared to January-March '24.
Like with mortgages, the amounts of auto loans differ significantly from the average. For half of the borrowers with modest sums, the quarterly auto loan volume did not exceed 8.3 million tenge, while for 10% of large auto borrowers, it was at least 13.8 million tenge. The average check for 10% of the smallest and 10% of the largest auto borrowers differs by 13 times: 1.4 million and 19.2 million tenge respectively.
As of April 1, individual debt towards various organizations hovered around 24.9 trillion tenge, including outstanding loans and accrued interest. Although the retail credit portfolio increased nominally by 3.2%, this growth rate pales in comparison to the 4.9% observed in the first three months of '24, taking into account inflation and tenge depreciation.
In the retail portfolio structure, the largest segment, making up 49%, is unsecured consumer loans, maintaining a consistent level for at least the past three years. Regarding mortgages and auto loans, the former's share is diminishing while the latter is increasing. As of April 1, auto loans accounted for 16% (up by 3% year-on-year), while mortgage loans accounted for 27%, down by 2%.
In summary, it's no secret that regulatory measures are tightening the reins on individual loan issuance in Kazakhstan. The decrease in loan issuance and growth in the number of borrowers is mainly due to tightened macroprudential measures aimed at cooling consumer lending and normalizing demand after unprecedented growth in late '24. The data presented indicates a stronger emphasis on regulating consumer loans, with a less regulated mortgage sector and stricter rules for auto loans. Lending institutions remain stable, albeit cautious, as exemplified by Kaspi.kz's 34% year-on-year increase in its average net loan portfolio in Q1 '25, along with a slightly higher non-performing loan ratio (5.6%) indicating some risks and increased cost of risk due to higher interest rates and macro provisioning.
- The decline in personal-finance indicators, such as the decrease in the number of loans issued and the increase in the average loan size, might lead some individuals to seek alternative methods for investing their money, like stocks or mutual funds on television, as traditional banking options become less accessible.
- In the realm of business and finance, understanding the trends in consumer loan segments, such as unsecured consumer loans, mortgages, and auto loans, can provide valuable insights for investment strategies, potentially leading to higher returns. For instance, analyzing the discrepancy in loan sizes among borrowers could indicate opportunities for businesses catering to different market segments.
