Analysis of the credit system of the Republic of Kazakhstan

KKB has four types of credit programs for corporate banking sector: 1) Program “Business Road Map 2020”; 2) Microcredit” 3) Loans for real estate for business; 4) Crediting of investment projects and the current starting business

As every sector of business corporate banking sector needs financing too. Some corporations have to take loans from banks in order to make some investments or in order to expand their business, so BTA and KKB offer to that corporations several types of credit programs with suitable conditions.

6) And the last objective of this work was to make SWOT analysis of BTA and KKB. As I mentioned above there are strengths, weaknesses, opportunities and threats of these banks.

Strengths are: a) BTA and KKB have a widespread presence in our country, allowing them to spread risk and enjoy economies of scale; b) Their brands are well-established historically and continually promoted, for example through sponsorship of charity concerts, establishment of some books, etc; c) The interest rates are lower than in other secondary banks.

Weaknesses are: a) Not in every affiliate there is a good quality of customer service; b) In some branches there is not enough cash register office, so clients have to wait in queue for a long time.

Opportunities are: a) Good financial position of them is creating a good reputation for future bank loans and borrowings; b) Skilled workforce means that they can be moved and trained into other areas of the business; c) The banks' strategy is to offer a full portfolio of services countrywide, providing a wide range of cross-selling opportunities; d) Both of them are continuously opening new affiliates among the country, trying to expand their positions.

Threats are: a) Large and increasing competition; b) While offering a wide range of services provides opportunities, there is also the threat that customers may prefer to go to suppliers who present a more specialized approach.

Both BTA and KKB are the main secondary banks of Kazakhstan. So there are few differences between them. And from this work we can understand this. Interest rates, lending terms, size of collaterals, etc. are almost the same.

According to research the difference is only in financing of corporate banking sector. BTA bank has few (almost doesn't have) credit programs for corporations, but KKB makes this type of financing much successfully. It has four types of programs for corporations.

Implications

First thing that I can recommend is about interest rates. This is the time of crisis for our country; problem of employment is not fully solved too. Not everyone can allow themselves to buy luxury things, apartments, etc. So they have to take loans from banks, but if banks have high interest rates on loans taken it is hard to repay it.

Secondly, I recommend to improve the quality of service in all branches of BTA and KKB. Some workers of the bank handle with their clients rudely, for example, with elder people or with students. I think everyone deserve the good relationship.

Third recommendation is about queuing problem in some affiliates of these banks. There are few number of cash register offices in some branches of BTA and KKB, so everyone have to wait for a long time in order to make some money transactions or repay their debts.

Future Research

During the research I have found some missing point in the area of credit policy of Kazakhstan. I will give follow some thought as what further could be studied in the area of research conducted.

There is a lot of information about the role of businesses in foreign countries, but few for our country's. For example it was hard to me to find the importance of financing of SMEs and corporations in Kazakhstan.

I would like to research this point myself in future or suggest this for other researchers.

Objectives follow were stated base on my purposes of whole study:

1. To understand the meaning of the term credit;

2. To understand the advantages and disadvantages of the credit;

3. To analyze company's credit program for Retail Banking sector of Kazakhstan of BTA;

4. To analyze company's credit program for Retail Banking sector of Kazakhstan of KKB;

5. To analyze company's credit program for Small and Medium Enterprises Banking sector of Kazakhstan of BTA;

6. To analyze company's credit program for Small and Medium Enterprises Banking sector of Kazakhstan of KKB;

7. To analyze company's credit program for Corporate Banking sector of Kazakhstan of BTA;

8. To analyze company's credit program for Corporate Banking sector of Kazakhstan of BTA;

9. SWOT analysis of BTA and KKB.

The follows findings overview:

1) Credit is the provision of money or goods on credit, usually with interest payments; valuation of economic category, an essential element of commodity-money relations.

2) Advantages of the loan are: 1) Interest rates; 2) Easy availability; 3) Good lending terms and relations with the bank; 4) Speed; 5) Uses; 6) No need for collateral; 7) No need to specify use of the money.

3) Disadvantages of the loan are: 1) Borrowers over-borrow; 2) Prepayment penalty; 3) Restrictions.

4) In BTA there are six types of credit program for retail banking sector: 1) Mortgage; 2) Loans under the program of JSC “Kazakhstan Mortgage Company”; 3) Credit line “Favorite”; 4) Auto loans; 5) “Universal School” Program; 6) Express Loans. And in KKB there are types of credit programs for retail banking sector: 1) Express loans; 2) Mortgage; 3) The lending program when buying “used” or “new” vehicles; 4) Loans for emergency needs; 5) Credit limit.

5) BTA has two types of credit programs for SMEs: 1) Standart financing of the subjects of SME; 2) Micro and Malyi credit facilities.

6) KKB has four types of credit programs for SMEs: 1) Program of Fund “Damu”; 2) “Business turnover”.

7) KKB has two types of credit programs for corporate banking sector: 1) Program “Business Road Map 2020”; 2) Microcredit.

8) Strengths are: a) BTA and KKB have a widespread presence in our country, allowing them to spread risk and enjoy economies of scale; b) Their brands are well-established historically and continually promoted, for example through sponsorship of charity concerts, establishment of some books, etc; c) The interest rates are lower than in other secondary banks. Weaknesses are: a) Not in every affiliate there is a good quality of customer service; b) In some branches there is not enough cash register office, so clients have to wait in queue for a long time. Opportunities are: a) Good financial position of them is creating a good reputation for future bank loans and borrowings; b) Skilled workforce means that they can be moved and trained into other areas of the business; c) The banks' strategy is to offer a full portfolio of services countrywide, providing a wide range of cross-selling opportunities; d) Both of them are continuously opening new affiliates among the country, trying to expand their positions. Threats are: a) Large and increasing competition; b) While offering a wide range of services provides opportunities, there is also the threat that customers may prefer to go to suppliers who present a more specialized approach.

References

1. http://en.wikipedia.org/wiki/Debt

2. http://en.wikipedia.org/wiki/Loan

3. Abramova, M.A., Aleksandrova L.S. Finance, money circulation and credit - Moscow, 1995, p 12

4. Gamidov G.N. Banking and credit business - Moscow: UNITY, Banks and Stock Exchanges, 1994, p 7

5. Kulikov, A.A., Votes V., Penkov E.E. Credits. Investment. - Moscow, 1995, pp 31-37

6. The general theory of money and credit. Edited by Zhukova E.F. - Moscow: Banks and stock exchanges, UNITY, 1995, pp 28-33

7. “Fundamentals of the business case”, edited by M. Osipova, E. Smirnova. - Moscow: Bek, 1996, pp 23-25

8. http://calcuttatube.com/bank-loan-advantages-and-disadvantages/45827/

9. http://bta.kz/en/about/

10. http://bta.kz/en/personal/

11. http://en.kkb.kz/page/WhoWeAre

12. http://bta.kz/ru/personal/credits/hypothec/

13. http://bta.kz/ru/personal/credits/hypothec/kmc/

14. http://bta.kz/ru/personal/credits/line/

15. http://bta.kz/ru/personal/credits/cars/

16. http://bta.kz/ru/personal/credits/unfak/about/

17. http://bta.kz/ru/personal/credits/express/

18. http://www.itdweb.org/smeconference/documents/plenary/PI%20Berry%20ENG.pdf

19. http://bta.kz/ru/buss/credits/lending/self-finansing/aul/

20. http://bta.kz/ru/buss/credits/lending/self-finansing/micro/

21. http://ru.kkb.kz/retail/page/CreditExpress

22. http://ru.kkb.kz/retail/page/CreditIpoteka

23. http://ru.kkb.kz/retail/page/CreditAutoNew

24. http://ru.kkb.kz/retail/page/CreditAutoNonew

25. http://ru.kkb.kz/retail/page/CreditNeotlojnye

26. http://ru.kkb.kz/cards/page/CardCreditLimit

27. http://ru.kkb.kz/business/page/Credits

28. http://ru.kkb.kz/business/page/Credits_damu

29. http://ru.kkb.kz/business/page/Credits_business_development

30. http://ru.kkb.kz/business/page/Credits_business_growth

31. http://ru.kkb.kz/business/page/Credits_special_culture

32. http://ru.kkb.kz/corporates/page/CreditsRoadCard

33. http://ru.kkb.kz/corporates/page/Credits_micro

34. http://ru.kkb.kz/corporates/page/Office_credits

35. http://en.tengrinews.kz/companies/Kazkom-BTA-merger-may-produce-largest-universal-bank-in-254612/

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