With the development of market economy increases not only the role of a commercial bank, but also their number, the range of services, types of operations. The direction of consumer credit is very popular among both banks and consumers. Indeed, both sides are the winners which is so difficult to achieve in real life. Buyer satisfied buying exactly what he wants at the moment, believing that «tomorrow's money cheaper» (sometimes without taking into account the size of these «tomorrow's money»).
Banks often share the same effective interest rates on them which reach more than 60%! In economically developed countries, it is almost impossible to meet the rate of more than 20%. Three times earnings, compared with foreign analogues this is a very tempted... Because now the site of almost any bank contains a link to a different degree visibility «Giving consumer credits to customers!»
In recent years, commercial banks, before more willing to work with corporate clients are increasingly paying attention to retail customers. Virtually all of the top ten banks announced the creation of its own crediting programs to individuals.
On the availability of credit to the public in the sense of willingness of banks to give such credits are strongly influenced by two factors: that the banks have little «long» money, and that the giving out of a relatively «small»credits less advantageous than giving out large credits.
Therefore, the problem of the need of developing a system of consumer credit problems affect both macro and credit mechanism in individual banks in particular Kazakhstan's entry into the market is largely due to the implementation of potential of the credit relationship. Therefore, one of the obligatory requirement for the formation of the market is a radical restructuring of attitude to the money and credit. The main objective of the reform maximum reduction of centralized redistribution of financial resources and the transition to a predominantly horizontal movement of the financial market. Creating a financial market means a fundamental change in the role of credit institutions in the management of the economy and the role of credit in the system of economic relations.
Modern banks provide a wide range of services to clients, apply the latest technology banking operations, provide a high level of service. The main economic functions of banks – crediting, accomplishing for financing of consumption and investment objectives of businesses, organizations, individuals and government agencies. On how well the bank realizes their credit function, depends largely on the economic situation of the clients they serve. Realizing the function of lending, banks thus provide their liquidity, and hence the stability of the system of market relations
The introduction of various forms of property, which is characteristic of a market economy, requires the existence of a monetary and credit system in which banking services to the public would be offered to individuals and legal entities by various banks on a competitive basis. Paramount importance questions banking population, the most extensive of its layers. Foreign experience shows that the banks that provide various services to the public, make with it a wide range of banking operations, generally have an advantage over banks with a limited set of services.
In the implementation of these reforms the main role belongs to commercial banks. They are a key tool in the management of financial and credit relations between corporations and individuals. Implementation of the new Economic Rights and Duties generates the need for multiple banking services and operations base for the development of which the former economic system were absent.
Recently, as part of the further diversification of its activities in the practice of Kazakhstan’s banks is increasingly being implemented consumer lending.
The development of consumer credit is closely related to the saturation wound goods, as well as the solvency of the middle strata of the population. With the increase in commodity circulation is increasing the amount of credit, as demand for products generates a demand for credit. Therefore, consumer credit can be seen as a means to promote the demand for goods.
This is due to the growth of individuals' deposits in banks. The creation of the deposit guarantee system and the overall increasing welfare led to the large banks financial resources. Immediately, there is a question where to place these funds? First of all the attention of bankers turned toward consumer lending. There are five reasons for that:
- This is a sufficient large market, in which there is still enough room for everyone (according to preliminary estimates the potential market of the country is about billion dollars).
- This not enough politicized market. Individuals are not so deeply interested in the problem of occurrence of a particular bank in a particular financial-industrial group. Much more on them makes an impression of advertising promotion of the bank and the speed of processing the loan.
- Individual borrowers are willing to pay much higher interest rates than their corporate counterparts. Case in absolute amounts, which amount to about 150 thousand tenge.
- Step one percent per annum with this credit is the difference in monthly payments of 125 tenge, which is hardly felt by borrowers.
- The risk of consumer credit is lower than the corporate. This is achieved through a highly diversified credit portfolio and higher credit discipline of individuals.
- Consumer lending is beneficial not only to banks, but also to trade organizations, which are clients of the same banks.
The main problem relevant to consumer lending, follow from its main advantage the small size of the consumer credit. For getting the credit portfolio, which is comparable with the corporate need to give consumer credits to several orders of greater than corporate. This makes very different demands on the work of the bank and its loan officers in terms of speed and technology.
If corporate credit can be compared with one unique work, then the consumer credit must be given by a series of mass, which requires radically change the principles of review and approval of credit applications. To automate the process it is necessary to minimize the human factor.
Recent studies have shown that, consumer credit is often relates to the most profitable credits, which may give a bank. But banking services aimed at consumers, can also be one of the costly and risky banking services as well as the financial situation of individuals can change rapidly due to illness or job loss.
Currently, consumer credits offered to individual borrowers by different commercial banks. In this case, among the main factors influencing the choice of the form of the credit agreement and credit conditions may include macroeconomic factors (general economic and political stability, the level of official interest rate NB RK, inflation expectations of the population, the purchasing power of the tenge, its stability and development of the currency and stock markets, market conditions credit capital and so on.) and microeconomic factors operating at the level of the bank and its customer (the bank's competitiveness experienced by him and his client risks, creditworthiness of the customer, to ensure the quality of the credit, whether the customer is a regular customer of the bank, whether it has a permanent sources of income, etc.). These and many other factors are taken into account when developing its bank credit policies governing credit terms, the level of interest rates charged by other credit terms.
Conditions in each case differ only slightly from the above: the annual interest rates of 18-25% in tenge and mandatory deposit, with the exception of small credits for the purchase of consumer goods, which can serve as a guarantee of the product itself.
In general, such a comprehensive range of consumer credits looks unique: perhaps it is even hard to imagine whether the Kazakhs in a few years as many opportunities to purchase anything on credit. The situation suggests two things. Firstly, the credit boom a clear sign of recovery in the economy and the emergence of the country is very big money. Secondly, it is better than any statistical evidence of financial and economic stability: if so many agencies doing business on the back of capital, ready to give long-term credits, both in hard currency and in tenge, which means that they trust the financial system and do not expect to receive any unexpected surprises.
All this is encouraging. However, we are still dealing with the phenomenon: in a country with a very low-income developing dynamically the most expensive types of consumer credit. Most of the questions is the structure of demand, that is, the number of clients, which now Kazakh creditor focuses.
Indeed, many representatives of the domestic «middle class» with a monthly income of about 400-1000 dollars, would not refuse a credit for 3-5 years at a rate of 1300020000 US dollars for the purchase of, for example, a car or a cheap apartment. However, despite the huge selection of proposals, only few banks offer such a credit on favorable terms.
Employees rating service «Express» was conducted a little experiment: in the car center MERCUR asked a credit to buy a car, explaining that the monthly income of the borrower is, say, $ 800. It turned out with such income can only rely on credit for «VAZ», but does not implement MERCUR under such conditions the car «VAZ» they are easily sold at retail. Credit program applies only to German cars. For example, you can buy a Volkswagen Passat $ 25 000 US dollars, but that your monthly income should not be less than US $ 1500-2000. In the end, of course, they found offers «VAZ» in installments. But it is difficult to call them profitable (except, perhaps, the bank offers «BTA» and one or two working with them companies). In most cases, or the interest rate is completely absurd up to 42% per annum, or the period of calculation of the loan was too short no more than 1 year.
A similar experiment with housing loans gave a similar picture. Relatively lowcost housing, which costs about 50-100 thousand dollars, almost no credits, except perhaps that the program of the same «Turan Alem» - «BTA-mortgage». With all the variety of offers auto and mortgage loans as long as «seek» the most affluent customers.
Head of estate agency Almaty Real Estate Zukhra Nazarova said most of today's mortgage project is focused on a narrow stratum of people with the highest incomes . Assessing the Almaty market housing loans, Ms. Nazarova marks it «opacity and secrecy». In her opinion, this situation is caused by both lenders desire to protect themselves from unnecessary risks, as well as some features of taxation. Banks, mortgage loans projects, according to Ms. Nazarova, often show such flexibility, as a result of which «even the wealthy people who can pay immediately, prefer to take an apartment on credit». It's bright enough description of the situation on the market.
However, this situation, as we see, is changing rapidly. By growing in recent months, the number of proposals out of the sector of the most expensive crediting, it can be considered about moving of the market in the direction of the gradual withdrawal of elitism. Studies in demand for household consumer goods, carried out by one of the banks showed that more than 55% of respondents are willing to buy on credit modern appliances washing machines, refrigerators, TV sets. The same bank «Turan Alem», who undertook to develop the most «popular» niche of the market, said the rapidly growing demand for all consumer credit products focused on relatively small (1-10 thousand. US$) amounts.«The market will grow, says head of retail lending BTA SauleIsina. All second-tier banks in Kazakhstan are moving from corporate to retail business. As the banking market is already saturated with corporate clients, we are increasingly turn to retail. In this regard, there is a recovery in the retail lending market. Now there is an intensive search for mechanisms of investment capital, so banks working with individuals, seek to expand their customer base. A major role in winning the sympathy of the population plays a competition between lenders, particularly among banks now there has been a downward trend in interest rates. The market adapts to the low purchasing power of the population, creating effective mechanisms for the redistribution of its private savings. The main obstacle that causes us in many cases to make unpopular for the client is high risk [2, p. 24].
As you can see, despite the vast and rapidly growing of supply, in Kazakhstan there is a large untapped demand for consumer credits. In a number of supply and demand are not joined. Obviously, the market is just beginning to move to meet satisfaction of the existing demand. In this way, there are serious traps and pitfalls.
One of the main problems in obtaining credit bank guarantees. Making any sufficiently large credit, you will inevitably face the problem of collateral. They should be your home, car, jewelry, expensive household appliances. The problem is not so much that the value is not always equivalent to the cost of the required sum, that client can find, but in the fact that in case of default of some part of the amount he loses everything. If you take out a credit from a trading company that sells a product (car or apartment), the security of this product, then you are underpaid in period of, say, 15-20% of the total, again risk losing all purchase .
Neither company engaged in housing credit, do not issue a complete alienation of property acquired for an apartment or house until full payment of the loan. And since the housing loan a phenomenon very extended in time, there is always the danger of any force majeure: bankruptcy, loan closing company. Although these moments are usually stipulated in the contract, the absence of full ownership rights to the payment of the whole amount of the loan is also fraught with the loss of all acquisitions and invested in it money. For example, in bankruptcy proceedings may begin selling the company's assets, and none of its credit agreements you are not a guarantee that the court make a decision in your favor.
Risks of banks are in non getting credit back, non-compliance value of the collateral loan volume, low stability of income in the country. By acknowledgement of the bankers, with significant growth in the volume of transactions with individuals they are concerned about the lack of credit history documents reflecting the payment of a particular person on previous credits. Analysis of these data in the world is an essential feature of banks with individuals.
Another problem related to the presence of undeclared money in circulation, paid to employees of certain companies in the form of so-called «black cash». Wages are not recorded in the accounting documents, you can spend, but it can not be represented as a confirmation of your bank solvency. It is well known that the practice of paying wages employers «black cash» is not because of a good life: to conduct double-entry bookkeeping they are forced draconian progressive tax rates. With a salary of 10 thousand tenge income tax is about 1.5 thousand., And with a salary of 50 thousand. Already about 14 thousand. If a citizen earns in a month of 500, 700, $ 1,000, the tax deduction can reach half yield, and even more. That is why many employers use for this category of workers «gray» schemes double-entry bookkeeping. But these people with incomes of US $ 500 and above «zone of special attention» banks, it is for this category of citizens is calculated most consumer credits. No bank would not, for example, the provision of a mortgage loan to the person who presented the certificate of wages in the 100-150 US dollars, even if in reality he gets a «black cash».
Let us return to the question of why a country with a fairly low standard of living demand the most expensive types of consumer credit (i.e., the elite mortgage). Some analysts attribute this situation to the legalization of shadow capital by obtaining and repayment of the credit. Of course, it would be wrong to absolute that opinion. However, the general lack of development of consumer crediting in Kazakhstan, the imbalance of supply and demand, and in particular the closure of an elite segment of the market comes up against the question of why the market is so «picky». Why, in particular, housing loans, which in Kazakhstan is much more expensive and much shorter in duration, than in Russia, while not seeking to become a «democratic».
Realtors and bankers agree that the normal development of this segment in Kazakhstan objectively constrained by the same factors as the development of the banking capital the lack of «long» cheap money and imperfection of legal regulation, including tax nuances. However, few openly talks about the internal situation in the market of housing loans. Meanwhile, it is characterized by an unprecedented revival. Only in Almaty today are built on credit scores mansions and luxury residential areas.
Based on some confidential assessment, we have built several schemes quite legitimate legalization of capital that can be used in the design of housing loans.
Here is one of such schemes. Making construction loan with equity participation the credit is received construction fulfilled the credit is returned. Under the current legislation is not declared source of funds that went to the repayment of loan for housing construction with equity participation. Thus, the money that paid for credit legalized.
In general, «reverse side» of the credit market suggests that, despite the extensive offer, it is still «raw” in Kazakhstan, not fully structured and quite civilized. But we see how saturation goes, offer spreads and selection grows. There are whole real estate company specializing in the sale of only housing loans. Advertising pages on newspapers full of sorts of loans, mortgages, fin leasing. All of this suggests the presence of a lot of money in the market who need the reverse.
If we carefully analyze the situation in the domestic financial market, it becomes clear that the free niches in the banking market is not so much. Consumer credit remains, essentially undeveloped «niche», where rates of 18-25% bring considerable profit, and market, consisting of millions of consumers, carries enormous potential. This is maybe not the fastest, but quite reliable mechanism of capital turnover. Finally, another motive activation in Kazakhstan’s credit market, some experts believe that it is the global financial trends. We are talking about the perceived bankers term dollar decline: they realize that by «hot» money must be disposed, causing them to run a profitable business, what in any case is lending 20-25% per year.
Kazakh consumer finance market for a few years behind Russia. There's the business began to grow in 1992-1993 in large metropolitan areas on the already familiar «elite» the way, and now a significant proportion of the population uses consumer credit not only in the centers, but also in the province. Strategy of Russian lenders initially based on extensive consumer research. In particular, after a series of monitoring in Moscow bank «Russian Standard» came to the conclusion that in Russia there are about forty million people whose income is between one hundred to thousands of dollars per month. Almost a quarter of the population is a huge market, through which bank capital in Russia has significantly increased opportunities for effective investment. And it is a market that today looks much more «democratic» than Kazakh as the structure of demand and the terms of the proposal.
Options of credits for private purposes look very democratic. In the Russian provinces, as in Kazakh, revenues are low, but, say, in Russia it is possible to get a loan, even earning less than $ 50 a month. Interest rates do not exceed 10-12% per annum, the maximum term five years. True, the «ceiling» of the amount of the credit is low only about $ 250, but for the peasant and is serious money. Finally, mortgage and car loans in Russia are also more favorable conditions for the consumer and do not look as elitist as in Kazakhstan. Interest rate mortgages advertised in Moscow, do not exceed 15-16%, the credits can be issued even for 10 years.
Even a cursory glance is enough to understand that the Russian consumer credit market during its existence seriously close to world standards. But the question is: what prevents lenders if they are interested in expanding their benefits, today make their services more accessible? In domestic banks meet unambiguously risks on it. Limiting the loan repayment period, strict conditions on its collateral, higher than in Russia, interest rates, high income requirement of the client all this is read as much as possible the desire of banks to protect themselves from losses in the nonreturn of borrowed money. In turn, it turns legal traps for customers.
The question is, what to do , here is just as relevant as it is complex. Obviously, the output is in a certain balance of policy of country and policy of banks. Need to improve the legal framework, especially the tax, in order to make loans more accessible to the masses of the population. It still need to think seriously about the stock market. Further saturation of the economy with money, while maintaining the current situation poses a threat to its overheating and even inflationary collapse .
Analysis of the practice of lending to individual customers in Kazakhstan led to a number of conclusions. First of all, the modern practice of lending by commercial banks has a different number of common features inherent in the initial stage of development of consumer lending in Kazakhstan. As a result of the relatively new practice of lending to individuals riddled with problems. The latter include:
- Deficiencies of the lending process;
- The use of cash in the issuance and repayment of the loan;
- Lack of economically viable interest rate policy;
- Problems of a legislative nature;
- A relatively narrow range of types of consumer loans.
Market analysis, in terms of income levels, purchasing power, provision of banking institutions in the regional aspect has shown that development lending costs in Kazakhstan is very acute. The banks bear the burden of the different risks: the risk of a sharp depreciation of the securities received as collateral loans, the death of the client's property as a result of natural disasters, etc., of fraud on the part of the borrower, with the retirement of the last permanent residence in an unknown direction, and his death transfer the debt to the relatives of the deceased, etc. Nevertheless, an important characteristic of the current state of the credit market is the ability to provide greater repayment of consumer loans, rather than loans to businesses and organizations.
Research has shown that modern Kazakhstan practice of lending to individuals for consumer needs to be improved both in terms of the expansion of credit facilities and differentiation conditions for granting loans.
From our perspective, it is necessary to develop a comprehensive banking services to the population, providing a wide range of the latest banking products and services, increasing revenues, forming the resource base of the bank, to expand credit relations with the public. Macroeconomic stabilization in general and to overcome inflation, in particular, will also allow the public greater use of bank loans to solve vital problems. All this points to the need for further development and improvement of credit bonds of commercial banks, with a population-based study of domestic and foreign experience.
- Назарова З. Недвижимость для людей с высокими доходами. www.expert.ru, 2007.
- Исина С. Переход от корпоративного кредитования к розничному // Мир финансов, №11, 2006.
- www.dn.kz, 2007