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More than a quarter of the residents of Kazakhstan receive their first loan under the age of 25
14 February 2020

According to PCB, 580,000 new borrowers who had not previously received any loans have entered the credit system of Kazakhstan during 2019. The loans received by them are worth more than KZT 176,000,000,000. The new borrowers receive loans worth on the average KZT 303,000,000.

9,000,000 residents of Kazakhstans are experienced in receiving loans at the banks. However, the purposes of loans vary widely depending on the age of the borrowers. The microfinance company Solva has carried out the special study in order to find out at what age people begin to receive loans and what differences exist between the main age groups of borrowers. More than 7,000 respondents aged 18 to 65 years took part in the study.

Three main age categories were identified that received the loans for the first time. The largest share embraces people aged 25 to 45 years (67.82 %). The youngest borrowers aged 18 to 25 years are slightly less numerous (28.74 %). The most adult category of people aged 45 to 65 years, as a rule, prefers not to receive loans at all. So that, the share of those who still use this financial service among them is only 3.45%

As a rule, young people receive their first loan for purchase of modern gadgets that, on the one hand, are necessary for communicating in social networks and instant messengers but, on the other hand, are specific social indicator to which the youth environment pays attention.

Smartphones (73%) prevail among the acquired equipment; they are often smartphones of premium brands with maximum performance. Also young people buy new models of headphones (18%) providing high-quality sound and tablets (7%) that are convenient for watching video. Quadrocopters and electric scooters (2%) are acquired using loans less often.

Older borrowers have more detailed and practical purposes of receiving loans: people tend to purchase housing (22%), vehicles (27%), buying household equipments (47%) and travel (4%).

Moreover, a significant number of residents of Kazakhstan, namely about 76%, received loans for weddings, jubilees, and even funerals. Education loans are also popular. The vast majority of them account for university studies of youth. At the same time, that are typically parents of students who draw loans to their own name.

The wedding party (toi) has special place in this list because  even those who basically prefer to live without loans receive wedding loans. Taking into account the wish of the newlyweds and their parents to make “everything like people do so”, almost 80% of weddings in Kazakhstan are carried out with the use of loans. This behavioural pattern is approximately the same when public opinion represented by relatives puts pressure on people forcing them to receive loans, and works with anniversaries.

With age the trend to receive loans significantly decreases, and practicality is granted highest priority. For example, people over 45 may receive loans for buying household appliances (47%), treatment (16%), education for children (37%), but in general, thanks to the fact that over time people reach certain financial stability and discipline, they increasingly rely on their savings and use loans in meaningful way.

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