The rich are respected: Kazakh youth take out loans just to show purchases on social media

Debt for the sake of likes

Almost half of all loans issued to Kazakhstan citizens this year were for personal needs: the purchase of household appliances, phones, and cars, reports otyrar.kz.

At the same time, a survey conducted by a relevant agency showed that young people often take loans due to a lack of self-confidence. About one-third of respondents admitted that they took out loans just to show their purchases on social media, and one-fifth believe that the rich are respected.

Retail lending volume in September of this year reached record levels. The total volume of loans exceeded 38 trillion tenge, of which about half were consumer and other personal loans, while business loans accounted for only one-third. Experts note that the rapid growth will soon begin to decline, as the National Bank is trying to reduce the pressure on consumer lending.

“The market is overheated at the moment, particularly in consumer financing. But globally this is generally a normal process: the more consumer financing the population receives, the more it contributes to the growth of the small and medium-sized business market, as well as trade supported by consumer financing,” says Arman BAIGANOV, financial advisor at R-FINANCE.

However, loan debts remain significant: the population’s credit debt has exceeded 19 trillion tenge.

“Last year, consumer loans grew by 33.5%, and this year – by 17–17.8%. Auto loans, which make up about 25% of the market, increased by 35%. At the same time, the volume of unsecured loans decreased by 12.7%,” says Madina ABYLKASSYMOVA, Chair of the Agency for Regulation and Development of the Financial Market.

Experts believe that it is necessary to improve financial literacy so that people stop living in debt. And banks should focus their efforts on supporting the real sector of the economy. The country’s president has also spoken about this, emphasizing the importance of reallocating resources to strengthen economic potential.

Photo: from social media.

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