Microfinance in Kazakhstan: An Inclusive Financial Sector for All

This report explains why and how microfinance has emerged and evolved in the past twenty years. It describes microfinance services and institutions, and reviews the challenges that the microfinance sector faces.

Analyzing the state of the microfinance sector in Kazakhstan, its challenges and opportunities, the report also:

• Explains the impact on the society and economy;
• Reviews several options for the development of the sector;
• Makes specific recommendations for the main stakeholders.

The report makes the following important points:

• Microfinance need to provide “an inclusive financial sector for all”;
• Microfinance is effective in:
  • Fighting poverty;
  • Enhancing self-esteem;
  • Empowering women.
• The high demand for microfinance in Kazakhstan remains unfulfilled;
• Prudent financial supervision in Kazakhstan allows only banks to collect savings;
• The main stakeholders include:
  • The state;
  • International organizations;
  • Banks;
  • Non-government organizations;
  • Microfinance organizations.

The report concludes by making recommendations that include:

• For Governments:
  • Facilitate an inclusive and open dialogue on microfinance;
  • Create a conducive environment for microfinance institutions (MFIs);
  • Avoid interventions like subsidized lending.
• For donors:
  • Participate in government microfinance projects to ensure transparency and effectiveness;
  • Support MFI associations;
  • Disseminate information about best practices.
• For MFIs:
  • Expand outreach in rural areas where the poor are concentrated;
  • Multiply networking and enhance national associations;
  • Facilitate knowledge sharing of best practices among the MFIs in Kazakhstan.