Retail lending system. Organization and essence of retail lending. Self-test questions

The target audience of retail lending is individuals with stable cash flows allowing you to repay the principal amount and interest on the loan for the entire loan period (including private entrepreneurs developing and running a profitable business).

Consumer loans are loans provided to the public. In this case, the nature of consumer loans is determined by the purpose of the loan (the object of lending).

The procedure for issuing and repaying a loan individuals. Documentation provided to the bank by the borrower to obtain a loan:

-application for a loan;
-passport or equivalent document;
- certificate from the place of work of the borrower and guarantors about income and the amount of deductions made;
-declaration of income received, certified tax office, for citizens involved entrepreneurial activity;
- passports (substituting documents) of guarantors and pledgors;
- other documents if necessary.

When providing property collateral as security for loan repayment, the borrower must provide:

- documents confirming ownership of the property: certificate of ownership of an apartment, house, privatization agreement, purchase and sale agreement, exchange, etc., including a certificate of ownership of a land plot, state act of ownership to the ground;
-an insurance policy in which the bank is the beneficiary, with mandatory annual (or other frequency) re-registration for full price property or for the amount secured by collateral. The property must be insured against possible risks;
-document on territorial boundaries land plot;
- floor plan of the house (for residential buildings, dachas);
- resolution on acceptance of a residential building into operation;
-permission government agencies for construction, design and estimate documentation approved in accordance with the established procedure;
- a certificate from the body conducting registration and technical inventory real estate objects;
-copy of financial and personal account (for apartment);
-extract from the house register;
-documents confirming the absence of debt on mandatory payments;
- characteristics of the living space;
- certificate of registration;
- notarized consent of all owners of the apartment to pledge it, and if there are minors in the family, permission from the guardianship and trusteeship authorities.

When pledging the purchased property, the relevant documents are provided within three months after receiving the loan:

a) when pledging vehicles:
- -technical certificate;
- -an insurance policy in which the bank is the beneficiary.

The vehicle must be insured against the risk of theft and damage.

b) upon collateral valuable papers:
- -securities;
- -extract from the register of shareholders of the bank.

Next, the bank checks the documents presented by the client and the information specified in the documents and the questionnaire, from the point of view of reliability, correctness of execution and compliance current legislation, determines the client’s solvency and maximum size loan.

The bank has the right to refuse to issue a loan in the following cases:

-if, during verification, facts of providing false documents or false information;
-if the borrower’s solvency or the loan repayment security provided does not meet the established requirements.

Issuance and repayment of consumer loans. After acceptance positive decision When issuing a loan, the following documents are drawn up: a loan agreement, a loan repayment schedule and a fixed-term obligation.

A prerequisite for granting a loan is the availability of timely and full security for the borrower's obligations, therefore, depending on the type of security, guarantee agreements, a pledge agreement and other documents are drawn up in accordance with the regulations on the provision of certain types of loans.

All conditions for providing consumer loans are agreed upon with two parties - the lender and the borrower - and are stipulated in the loan agreement. When concluding a loan agreement, banks actually offer the borrower to join pre-prepared standard conditions, which depend on the type of consumer loan provided. Usually, only such essential conditions as the amount of the loan, the amount of payment for it, the term of using the loan, and, less often, the amount of penalties are subject to agreement.

Currently, banks accept as collateral:

1) guarantees of citizens who have a permanent source of income;
2) guarantees from solvent enterprises and bank client organizations;
3) liquid securities pledged by an individual;
4) liquid securities pledged legal entity;
5) real estate objects pledged as collateral, vehicles and other property.

When using guarantees and collateral of property as collateral, the loan is issued after the execution of surety and collateral agreements in the prescribed manner and insurance in favor of the bank in one of the insurance companies offered by the bank for the property provided as collateral. Exceptions include collateral for purchased property and construction projects. In this case, the agreement provides for the borrower’s obligation to provide the bank with an insurance policy and Required documents to conclude a pledge agreement:

- when pledging the purchased property within two months from the date of issuance of the loan;
- when pledging an unfinished construction project - within the period established by agreement of the parties, but not more than one year from the date of issuance of the loan.

It is not permitted to conclude a loan agreement using the collateral of the property being acquired or a facility under construction as the only type of security.

An age limit is established for borrowers and guarantors. To record the issued loan, the bank opens a loan account. A loan account is not an account of the borrower, but an intra-balance sheet account of the bank. It reflects the amount of the loan already issued to the borrower. As a rule, the bank provides a loan to the borrower by issuing money from the cash desk or in a non-cash manner by: transferring to his demand account opened in this bank, crediting to the account plastic card borrower, payment of bills of trade and other organizations, transfers to the accounts of citizen entrepreneurs.

After the loan is issued, the bank continues to work with the client to ensure repayment of the loan. During the period of validity of the loan agreement, the bank:

1) controls the borrower’s compliance with the terms of the agreement;
2) checks reports on the expenditure of funds. The borrower must provide the bank, within two months from the date of receiving a loan for the purchase of real estate, documents confirming his ownership of the purchased property;
3) carries out on-site inspection. The inspection determines the compliance of the objects under construction with the projects, the presence of unspent building materials, compliance of the actual work performed with the volume indicated in the reports on the expenditure of funds under the loan;
4) takes measures to repay overdue debts;
5) draws up changes to the terms of the loan and other agreements, and also in the event of a violation by the borrower of the terms of the loan agreement, can resolve the issue of terminating the agreement unilaterally;
6) contributes necessary information to the database of individual borrowers;
7) carries out operations to form a reserve for possible loan losses.

If the borrower does not exercise his right to receive a loan within one month from the date of concluding the loan agreement, the bank sends him a notice of unilateral termination of the agreement. The procedure for repaying the loan is stipulated in the loan agreement or in the payment schedule and urgent obligation, which are an integral part of the loan agreement.

The amounts contributed by the borrower to repay the debt under the loan agreement are sent, regardless of the purpose of the payment indicated in the payment document, in the following order:

- to pay a penalty;
- to pay overdue interest;
- for payment of urgent interest;
- to repay overdue loans

Loan repayment, interest and penalties are paid:

1) in cash, through the cash register;
2) transfer from deposit accounts;
3) through retention from wages, pensions;
4) transfers through communication companies or others.

In addition, the bank always reserves the right to collect the loan early. If payments to repay the loan debt are not received from the borrower, the bank turns its foreclosure on the collateral provided under this loan. Repayment of uncollectible loans is made through the reserve for possible loan losses.

A mortgage loan secured by real estate, including land ownership, is also one of the forms of lending widely used in market economy, ensuring the reliability of the transaction. Its development helps to increase the investment activity of business entities in conditions of scarcity of long-term credit resources and high inflation rates.

System mortgage lending includes two directions:

-direct issue mortgage loans business entities and the population;
-sale of mortgage loans on the secondary market, which provides additional attraction of resources for lending.

The first direction is handled by banks, the second financial companies, funds (in the Republic of Kazakhstan - a mortgage company), buying up the assets of mortgage banks, secured by a pledge of property, and then, on their own behalf, issuing securities on their basis. Mortgage loans are always secured by real estate - a mortgage.

Conditions mortgage loan allow the borrower to use the purchased apartment (or other real estate) as if it were his own, with almost no restrictions, however, the borrower will be able to sell, donate or exchange the apartment after removing its collateral, after full repayment of the loan, or re-registration of the contract for new owner, sir consent of the creditor.

The Government of the Republic of Kazakhstan by the resolution “On approval of the program long-term financing housing construction and development of the mortgage lending system" dated November 28, 2000 No. 1774 outlined a number of measures aimed at stimulating housing construction and mortgage lending. The government considered the German and Malaysian models of mortgage lending to be the most acceptable for Kazakhstan.

The German model operates on the principle of a mutual aid fund. The bank's credit resources are formed by attracting savings from future borrowers. Only a bank client has the right to receive a mortgage loan, and in an amount approximately equal to the amount of savings. This model provides less incentive for the acquisition of real estate, since the moment of acquisition moves in time. But at the same time it does not depend on fluctuations on financial market and prices borrowed money. Persons wishing to improve living conditions, must take care of this in advance. Within 2-10 years before purchasing an apartment or house, they must begin making targeted savings in specialized banks. When approximately 45% of the property's value has been accumulated, its buyers receive a government subsidy in the amount of 10% of the property's value. And preferential loan for 10-15 years for the remaining part of the payments.

The Malaysian model works by creating a mortgage company, which commercial banks can sell mortgage bonds and continue to provide loans for the purchase of housing with the money received. Unlike the German model, the moment of purchasing real estate is not delayed in time.

The government does not exclude the use of the American model of mortgage lending in Kazakhstan through the organized securities market.

The American model is built on two main lending principles: construction and home purchase. The bank provides a construction loan to the contracting firm to purchase land and pay for design and construction work. Then the buyer is directly involved in the construction process, who is issued a mortgage loan against the security of the future home. The loan is issued against low percentage for a period of 15 to 30 years, depending on the borrower’s income. The loan is formalized by a mortgage or deed of trust that transfers title to the lender in the event of default. The lender can sell the mortgage to the Federal National Mortgage Association and thus be able to continue issuing loans using the money received from it. The latter acquires from financial institutions mortgages and issues mortgage-backed securities. The Federal Housing Administration provides mortgage insurance. This model is also used to develop commercial lending to small businesses secured by property.

Despite certain differences, all of the above mortgage lending models represent good options for stimulating the purchase of housing for their respective countries.

In conditions transition economy For Kazakhstan, in the absence of stable incomes for the majority of the population, mortgage lending contributes to the development of the real estate market and the entire economy. Residential mortgage loans have received the greatest development.

Currently, commercial banks can issue three types of residential mortgage loans:

a) short-term or long-term loan provided to borrowers for the purchase and development of land for upcoming housing construction, land loan;
b) short-term loan for the construction (reconstruction) of housing, provided to finance construction work, construction loan;
c) long-term loan for the purchase of housing - a loan for the purchase of housing.

The main documents defining the relationship between the bank and the borrower when providing a loan are the loan agreement and the collateral (mortgage) agreement. The loan agreement defines: the purpose of obtaining a loan, the term and size of the loan, the procedure for issuing and repaying the loan, the lending instrument (interest rate, conditions and frequency of its changes), securing the borrower’s obligations, the terms of loan insurance, sanctions for misuse and late repayment of the loan, the amount and procedure for paying fines, the procedure for terminating the contract, other conditions by agreement between the lender and the borrower.

In order to create mechanisms for financing housing construction, solving housing problems of the general population, reducing housing prices and stimulating housing construction, the Concept of long-term financing of housing construction and development of the mortgage lending system in the Republic of Kazakhstan was approved by Decree of the Government of the Republic of Kazakhstan dated August 21, 2000 No. 1290.

In accordance with the Concept, the National Bank of the Republic of Kazakhstan in December 2000 created an operator of the secondary mortgage loan market to refinance long-term mortgage loans to the population issued by second-tier banks - Kazakhstan Mortgage Company JSC (KMC).

The procedure for obtaining a mortgage housing loan according to the program of the Kazakhstan Mortgage Company consists of stages:

1. Pre-qualification of the borrower. At this stage, you can obtain all the necessary information about lending conditions, rights and obligations, and assess the possibilities of obtaining a mortgage loan.
2. Choosing a home (if you receive a loan to purchase it).
3. Conducting an assessment of the selected housing. The selected housing is assessed independent appraiser with a state license.
4. Underwriting. At this stage, the bank assesses the client's ability to repay the loan and also verifies the accuracy of the information provided. In this case, one of the conditions for obtaining a loan is life and disability insurance.
5. Conclusion of contracts:
6. Carrying out settlements with the home seller.
7. Insurance of purchased housing for the first year.
8. Conclusion of a mortgage agreement and its state registration at the Real Estate Center.

Standard lending conditions assume a ratio of the loan amount to the value of the collateral of 70%. At the same time, it is allowed to increase the loan to 85%, subject to 15% insurance in one of the insurance companies. The borrower's solvency ratios (the ratio of loan payments and all payments to the family's net income) are allowed within 35 - 50%.

Government and National Bank considers KFGIK JSC as one of the tools for implementation State program, which allows you to reduce the amount of the down payment on mortgage loans if there is a guarantee from KFGIC JSC. Supporting the basic principles of the State program, on June 9, 2004, KFGIK JSC joined the Memorandum of Cooperation on the implementation of the State Program for the Development of Housing Construction in the Republic of Kazakhstan for 2005-2007, which was concluded in May 2004 by the Ministry of Finance of the Republic of Kazakhstan, second-tier banks and mortgage companies, including KFC, which is one of the partners of KFGIC JSC in accordance with the Cooperation Agreement dated July 28, 2004.

By Special program within current Program mortgage lending KIK, an initial fee for mortgage loans will be reduced to 10%, subject to mandatory guarantee from KFGIC JSC.

There is a certain procedure for guaranteeing mortgage loans. The Bank cooperates with the Fund on the basis of a General Agreement, according to which the lender is obliged to fulfill the following requirements:

1) proper execution established requirements Fund and General Agreement;
2) timely and high-quality underwriting of mortgage loans;
3) informing borrowers about the possibility of obtaining guaranteed mortgage loans;
4) providing the Fund with the opportunity to unhindered verification of information and documents related to the guaranteed mortgage loan;
5) timely notification of the Fund about the beginning, conduct, completion of the foreclosure procedure, the date, time and place of the auction and the results of the auction with the provision of documents evidencing this;
6) timely notification of the Fund about termination mortgage agreement caused by the fulfillment of obligations by the borrower under a residential mortgage loan agreement, the occurrence of insured events under insurance contracts concluded by the borrower with insurers, the lender's repossession of the pledged property when the auction was declared invalid, the sale of the pledged property at auction and other cases established by the General Agreement;
7) timely submission of other information to the Fund in accordance with these Rules and the terms of the General Agreement;
8) fulfillment of other requirements, provided for by law Republic of Kazakhstan.

The Fund provides the lender with all documents related to guaranteeing the mortgage loan.

From the date of signing the General Agreement, the creditor bank has the right to submit an application to the Fund to guarantee a mortgage loan.

Before submitting an application to the Fund, the lender prequalifies the potential borrower in accordance with the Fund's requirements. Upon acceptance of a positive conclusion, the Fund sends 2 copies to the creditor bank warranty obligation

In the fourth quarter of 2010, it became obvious that for most banks priority direction is lending, and the set credit offers amazes with its diversity - to traditional products such as mortgages, car loans, credit card, banks began to add more complex programs, such as savings programs. The creativity of banks extended not only to changing the terms of products in favor of customers, but also to adding additional options for various lending programs

As can be seen from Fig. 7, in 2010, banks demonstrated, if not rapid, but stable growth in their loan portfolio. As of December 1, 2010, the volume of the loan portfolio amounted to 3.9 trillion rubles, but the lending market showed the greatest positive dynamics in August of this year - an increase of 1.95%.

Fig 7.

The volume of loans provided to individuals continues to increase, despite the fact that many credit institutions are trying in every possible way to conceal the real cost of the loan from the potential borrower at the stage of completing the loan application. Banks, when advertising their loan products, are silent or do not fully disclose information about the actual interest rates charged for using a loan, commissions and other hidden additional payments on the loan.

Statistics show that the majority of our compatriots make a hasty decision when purchasing goods in installments. And this is a very serious problem. At the same time, Russians do not study lending conditions in detail enough, which they later regret, because in the process of servicing the loan, they “encounter pitfalls” of additional payments and the terms of the loan agreement.

The structure of payments under the loan agreement consists of the following components:

- repayment of the principal debt
- interest for using the loan
- insurance costs
- additional payments

If the borrower carefully reads the text of the loan agreement, he will be able to find relevant items printed in small print that the bank representatives did not draw the client’s attention to when applying for the loan. We can safely say that hiding the real cost of the loan by hiding additional payments is a kind of trick used to attract customers.

Thus, one of the most important problems consumer lending is that a potential borrower is not always able to independently carefully study and comprehend the terms of the loan agreement. Instead of applying for an express loan, say, at 10% per annum plus hidden additional payments (the result is almost 50% of a loan taken for a year), it is much more profitable to contact a bank that offers 20% per annum and does not require any additional payments. As a rule, the client chooses lower declared interest (10% per annum) and will apply for a loan directly at the point of sale, ultimately taking advantage of the worst offer.

Many credit institutions introduce their clients to the details of the loan agreement only after the loan has been issued. Such customers are unlikely to re-take advantage of the low interest rate and opportunity quick registration loan. This phenomenon, naturally, undermines public confidence in credit institutions.

For a comprehensive objective analysis, it is necessary to perform additional mathematical calculations, because Currently, the loan interest rate announced in advertising is losing its role as a guide for potential borrowers. As a result, banks leave clients alone with aggressive advertising for consumer lending, which cannot be quickly understood by a person who does not have a lot of free time and good mathematical abilities.

In addition, an equally important problem is that the phenomenon of unfair competition is currently observed in the personal lending market, i.e. banks offering loans to the population on more favorable terms lose potential clients due to unscrupulous competitors who provide biased advertising information that does not disclose the real cost of the loan product.

For now, commercial banks have the opportunity to dictate their terms to consumers and set high interest rates. But soon competitiveness, a tough fight for each client and the very opportunity to stay and develop in the retail lending market will depend on the bank’s ability to establish its pricing policy, which means the ability to work with problem loans.

Another very important problem in consumer lending is the growing share of loan defaults. Already, according to official statistics alone, the share of problem loans in banks’ portfolios averages 1.3%. According to unofficial data, the real level of problem debt in some banks reaches 5-6% of the loan portfolio. It should be noted that these indicators do not apply to mortgage lending.

One of the main reasons for this level of problem debt (quite high) is that the improvement of risk assessment methods and systems in Russian banks does not keep pace with the development of the rapidly growing market. Therefore, banks often choose the following “way of working” with problem debts - the existing and expected default rates on loans cover the very high interest rates, commissions and tariffs for these products.

To avoid a brewing crisis of mistrust due to a lack of transparency of lending conditions, potential borrowers must understand the total amount it will cost them to service the loan, and credit institutions at the stage of completing a loan application are obliged to inform clients about all related loan conditions, lump sum payments and periodic payments for billing periods.

Regarding the solution to the problem of reducing problem debt, you can apply several options for organizing work with it:

1. creation in a bank separate division responsible for working with problem debts, or creating a “subsidiary” company at the bank - a collection agency dealing only with the bank’s problem debts.
2. transfer of debts for collection to non-specialized companies.
3. transfer of problem debt for collection to independent collection agencies specializing in working with problem loans.

As for increasing profitability in consumer lending, in this case We are talking about reducing a number of risks, reducing losses due to ineffective operations and ineffective actions.

There are several ways to reduce losses in consumer lending. First of all, this is, of course, reducing the risk when issuing a loan, i.e. optimization of decision-making on issuing a loan. Secondly, it is the optimization of work with bad debts that arise in any bank. And this is support for existing borrowers (i.e., how to reduce risks in the process when the debt has already been issued).

How exactly can these issues be resolved?

On the one hand, you can immediately tighten the scoring system or issuance policy, i.e. conservative credit policy. It provides a high-quality loan portfolio. On the other hand, it is possible to expand the market for issuing loans, but then the risky portfolio increases. It should be noted that with both types of policies the situation is only partially monitored. It is known that in the process of consumer lending, about 80% of the main losses are losses from obvious fraud, but 20% (quite large percentage) - losses due to various circumstances. For a conservative credit policy, the main task is comparative analysis input stream and the existing base (to understand who else from the input stream can be attracted). First of all, this is an expert analysis. Using various methods, the flow is analyzed and conclusions are drawn by experts.

There are the following solutions to improve the quality of decisions made:

Optimization of the decision-making system for the applicant:

increasing the accuracy of forecasting by identifying various types of undesirable behavior;

building separate methods for different groups of clients;

making comprehensive decisions for each borrower ( credit limit, rate, duration).

Optimizing work with bad debts:

predicting the behavior of a defaulted borrower and adopting a strategy to deal with it;

analysis of bad debt support and optimization.

Continuously predict the likelihood of defaults among existing borrowers based on their behavior.

Optimization of reserved funds by predicting the number of overdue payments for the coming month.

Regarding the problem of unfair competition, the following is necessary to eliminate it. Lenders must describe the procedure and frequency of interest accrual, provide the borrower with a scheduled payment schedule, require from the client documents that are necessary to assess the borrower's creditworthiness, and provide information about possible types of loan security. If in advertising banking services for lending to individuals, at least one of the client’s expenses for the loan received is reported, then the remaining payments must also be indicated.

In the current conditions, the average consumer needs a simple and understandable guideline on the basis of which he could compare various offers from banks. As the main criterion by which the borrower could assess the real cost of the loan, regardless of what rates and commissions the bank uses to increase profitability, it is proposed to use the effective annual interest rate (Annual Percentage Rate of Charge, abbreviated as APR), which is used when lending to individuals persons in the UK since 1974 This indicator is an objective assessment of the real cost of a consumer loan and can serve as the main guideline for clients making a choice in favor of a particular loan product. Publication of the effective annual interest rate in advertising would introduce the necessary transparency, which would allow each potential client to make an informed choice in favor of one or another loan product offered.

With the problem of unfair competition and violations of the law on protection of competition in the market financial services FAS is fighting. This service identifies unscrupulous financial institutions that hide or biasedly inform potential borrowers about the size of real interest rates for using a loan, commissions and other hidden additional payments.

March 11, 2005 FAS and Central bank The Russian Federation has developed recommendations for banks with the aim of “preventing credit institutions from obtaining non-competitive advantages” when lending to individuals. The essence of these recommendations was to disclose the conditions for the provision, servicing and repayment of loans. The proposed recommendations specifically state that:

information must be provided to the consumer before concluding a loan agreement. If special banking terminology is used, the credit institution provides appropriate explanations to it, so that the information is understandable to persons who do not have special knowledge in this area, and is accessible without the use of information and communication technologies.

The information must indicate:

Name credit organization, registration number, location, contact number and WEB site of the credit institution;

minimum (maximum) term of a consumer loan;

the minimum (maximum) amount of a consumer loan (credit limit), as well as the currency of the consumer loan;

consumer expenses for the loan received, consisting of annual interest for a consumer loan, including all types of payments to a credit institution and third parties related to the provision, use and repayment of a loan;

the procedure and time frame for considering a consumer’s application for a loan;

conditions early repayment loan, etc.

Target: Consider the features of lending to individuals.

Lecture questions: review current consumer lending practices.

The target audience of retail lending is individuals who have stable cash flows that allow them to repay the principal amount and interest on the loan for the entire loan period (including private entrepreneurs developing and operating a profitable business).

Consumer loans are loans provided to the public. In this case, the nature of consumer loans is determined by the purpose of the loan (the object of lending).

The procedure for issuing and repaying loans to individuals. Documentation provided to the bank by the borrower to obtain a loan:

Application for a loan;

Passport or equivalent document;

Certificate from the place of employment of the borrower and guarantors about income and the amount of deductions made;

Declaration of income received, certified by the tax office, for citizens engaged in entrepreneurial activities;

Passports (substituting documents) of guarantors and pledgors;

Other documents if necessary.

When providing property collateral as security for loan repayment, the borrower must provide:

Documents confirming ownership of a real estate property: certificate of ownership of an apartment, house, privatization agreement, purchase and sale agreement, exchange, etc., including a certificate of ownership of a land plot, state act of ownership of land;

An insurance policy under which the beneficiary is a bank, with mandatory annual (or other frequency) renewal for the full value of the property or for the amount secured by collateral. The property must be insured against possible risks;

Document on the territorial boundaries of the land plot;

Floor plan houses (for residential buildings, dachas);

Resolution on the commissioning of a residential building;

Permission from government authorities for construction, design and estimate documentation approved in the prescribed manner;

A certificate from the authority conducting registration and technical inventory of real estate;

A copy of the financial and personal account (for an apartment);

Extract from the house register;

Documents confirming the absence of debt on mandatory payments;

Characteristics of the living space;

Certificate of registration;

Notarized consent of all apartment owners to pledge it, and if there are minors in the family, permission from the guardianship and trusteeship authorities.

When pledging the purchased property, the relevant documents are provided within three months after receiving the loan:

a) when pledging vehicles:

Technical certificate;

An insurance policy in which the bank is the beneficiary.

The vehicle must be insured against the risk of theft and damage.

b) when pledging securities:

Securities;

Extract from the register of bank shareholders.

Next, the bank checks the documents presented by the client and the information specified in the documents and the questionnaire, from the point of view of reliability, correctness of execution and compliance with current legislation, determines the client’s solvency and the maximum loan amount.

The bank has the right to refuse to issue a loan in the following cases:

If, when checking, facts of providing false documents or false information are revealed;

If the borrower's solvency or the provided loan repayment security does not meet the established requirements.

Issuance and repayment of consumer loans. After making a positive decision to issue a loan, the following are drawn up: a loan agreement, a loan repayment schedule and a fixed-term obligation.

Currently, banks accept as collateral:

1) guarantees of citizens who have a permanent source of income;

2) guarantees from solvent enterprises and bank client organizations;

3) liquid securities pledged by an individual;

4) liquid securities pledged by a legal entity;

5) real estate objects, vehicles and other property pledged.

If the purchased property is pledged within two months from the date of issuance of the loan;

When pledging an unfinished construction project - within the period established by agreement of the parties, but not more than one year from the date of issuance of the loan.

It is not permitted to conclude a loan agreement using the collateral of the property being acquired or a facility under construction as the only type of security.

An age limit is established for borrowers and guarantors. To record the issued loan, the bank opens a loan account. A loan account is not an account of the borrower, but an intra-balance sheet account of the bank. It reflects the amount of the loan already issued to the borrower. As a rule, the bank provides a loan to the borrower by issuing money from the cash register or by bank transfer by: transferring to his demand account opened in this bank, crediting the borrower’s plastic card account, paying bills of trade and other organizations, transferring to the accounts of citizen entrepreneurs .

After the loan is issued, the bank continues to work with the client to ensure repayment of the loan. During the period of validity of the loan agreement, the bank:

1) controls the borrower’s compliance with the terms of the agreement;

2) checks reports on the expenditure of funds. The borrower must provide the bank, within two months from the date of receiving a loan for the purchase of real estate, documents confirming his ownership of the purchased property;

3) carries out on-site inspection. The inspection determines the compliance of the objects under construction with the projects, the presence of unspent construction materials, the compliance of the actual work performed with the volume indicated in the reports on the use of loan funds;

4) takes measures to repay overdue debts;

5) draws up changes to the terms of the loan and other agreements, and also in the event of a violation by the borrower of the terms of the loan agreement, can resolve the issue of terminating the agreement unilaterally;

6) enters the necessary information into the database of individual borrowers;

7) carries out operations to form a reserve for possible loan losses.

The amounts contributed by the borrower to repay the debt under the loan agreement are sent, regardless of the purpose of the payment indicated in the payment document, in the following order:

To pay a penalty;

To pay overdue interest;

For payment of urgent interest;

To repay an overdue loan

Loan repayment, interest and penalties are paid:

1) in cash, through the cash register;

2) transfer from deposit accounts;

3) through deduction from wages and pensions;

4) transfers through communication companies or others.

In addition, the bank always reserves the right to collect the loan early. If payments to repay the loan debt are not received from the borrower, the bank forecloses on the collateral provided for the loan. Repayment of uncollectible loans is made through the reserve for possible loan losses.

A mortgage loan issued against real estate, including land property, is also one of the forms of lending widely used in a market economy, ensuring the reliability of the transaction. Its development helps to increase the investment activity of business entities in conditions of scarcity of long-term credit resources and high inflation rates.

The mortgage lending system includes two areas:

Direct issuance of mortgage loans to business entities and the population;

Sale of mortgage loans on the secondary market, which provides additional attraction of resources for lending.

The first direction is dealt with by banks, the second by financial companies, funds (in the Republic of Kazakhstan - a mortgage company), which buy up the assets of mortgage banks, secured by collateral of property, and then issue securities on their own behalf on their basis. Mortgage loans are always secured by real estate - a mortgage.

The terms of the mortgage loan allow the borrower to use the purchased apartment (or other real estate) as if it were his own, with almost no restrictions, however, the borrower will be able to sell, donate or exchange the apartment after removing its collateral, after full repayment of the loan, or re-issuing the contract to a new owner - with the consent of the lender .

The Government of the Republic of Kazakhstan, by its resolution “On approval of the program for long-term financing of housing construction and development of the mortgage lending system” dated November 28, 2000 No. 1774, outlined a number of measures aimed at stimulating housing construction and mortgage lending. The government considered the German and Malaysian models of mortgage lending to be the most acceptable for Kazakhstan.

The German model operates on the principle of a mutual aid fund. The bank's credit resources are formed by attracting savings from future borrowers. Only a bank client has the right to receive a mortgage loan, and in an amount approximately equal to the amount of savings. This model provides less incentive for the acquisition of real estate, since the moment of acquisition moves in time. But at the same time, it does not depend on fluctuations in the financial market and prices of borrowed funds. Persons wishing to improve their living conditions should take care of this in advance. Within 2-10 years before purchasing an apartment or house, they must begin making targeted savings in specialized banks. When approximately 45% of the property's value has been accumulated, its buyers receive a government subsidy in the amount of 10% of the property's value. And also a preferential loan for 10-15 years for the remaining part of the payments.

The Malaysian model works by creating a mortgage company to which commercial banks can sell mortgage bonds and use the money to continue to provide loans for home purchases. Unlike the German model, the moment of purchasing real estate is not delayed in time.

The government does not exclude the use of the American model of mortgage lending in Kazakhstan through the organized securities market.

The American model is built on two main lending principles: construction and home purchase. The bank provides a construction loan to the contracting firm to purchase land and pay for design and construction work. Then the buyer is directly involved in the construction process, who is issued a mortgage loan against the security of the future home. The loan is issued at a low interest rate for a period of 15 to 30 years, depending on the borrower’s income. The loan is formalized by a mortgage or deed of trust that transfers title to the lender in the event of default. The lender can sell the mortgage to the Federal National Mortgage Association and thus be able to continue issuing loans using the money received from it. The latter purchases mortgages from financial institutions and issues mortgage-backed securities. The Federal Housing Administration provides mortgage insurance. This model is also used to develop commercial lending to small businesses secured by property.

Despite certain differences, all of the above mortgage lending models represent good options for stimulating the purchase of housing for their respective countries.

In the conditions of a transition economy for Kazakhstan, in the absence of stable incomes for the majority of the population, mortgage lending contributes to the development of the real estate market and the entire economy. Residential mortgage loans have received the greatest development.

Currently, commercial banks can issue three types of residential mortgage loans:

a) short-term or long-term loan provided to borrowers for the acquisition and development of land for upcoming housing construction, land loan;

b) short-term loan for the construction (reconstruction) of housing, provided to finance construction work, construction loan;

c) long-term loan for the purchase of housing - a loan for the purchase of housing.

The procedure for obtaining a residential mortgage loan under the program of the Kazakhstan Mortgage Company consists of the following stages:

1. Borrower prequalification. At this stage, you can obtain all the necessary information about lending conditions, rights and obligations, and assess the possibilities of obtaining a mortgage loan.

2. Choosing a home (if you receive a loan to purchase it).

3. Conducting an assessment of the selected housing. The assessment of the selected housing is carried out by an independent appraiser with a state license.

4. Underwriting. At this stage, the bank assesses the client's ability to repay the loan and also verifies the accuracy of the information provided. In this case, one of the conditions for obtaining a loan is life and disability insurance.

5. Conclusion of contracts:

6. Carrying out settlements with the home seller.

7. Insurance of purchased housing for the first year.

8. Conclusion of a mortgage agreement and its state registration in the Real Estate Center.

The Government and the National Bank consider KFGIC JSC as one of the tools for implementing the State program, which allows reducing the amount of the down payment on mortgage loans with a guarantee from KFGIC JSC. Supporting the basic principles of the State program, on June 9, 2004, KFGIK JSC joined the Memorandum of Cooperation on the implementation of the State Program for the Development of Housing Construction in the Republic of Kazakhstan for 2005-2007, which was concluded in May 2004 by the Ministry of Finance of the Republic of Kazakhstan, second-tier banks and mortgage companies, including KFC, which is one of the partners of KFGIC JSC in accordance with the Cooperation Agreement dated July 28, 2004.

Under the Special Program within the framework of the current KMC Mortgage Lending Program, the initial payment on mortgage loans will be reduced to 10%, subject to mandatory guarantee by KMFGIC JSC.

1) proper fulfillment of the established requirements of the Fund and the General Agreement;

2) timely and high-quality underwriting of mortgage loans;

3) informing borrowers about the possibility of obtaining guaranteed mortgage loans;

4) providing the Fund with the opportunity to unhindered verification of information and documents related to the guaranteed mortgage loan;

5) timely notification of the Fund about the beginning, conduct, completion of the foreclosure procedure, the date, time and place of the auction and the results of the auction with the provision of documents evidencing this;

6) timely notification of the Fund about the termination of the mortgage agreement caused by the fulfillment of obligations by the borrower under the residential mortgage loan agreement, the occurrence of insured events under insurance contracts concluded by the borrower with insurers, the lender's repossession of the pledged property when the auction was declared invalid, the sale of the pledged property at auction and in other cases established by the General Agreement;

7) timely submission of other information to the Fund in accordance with these Rules and the terms of the General Agreement;

8) fulfillment of other requirements provided for by the legislation of the Republic of Kazakhstan.

The Fund provides the lender with all documents related to guaranteeing the mortgage loan.

From the date of signing the General Agreement, the creditor bank has the right to submit an application to the Fund to guarantee a mortgage loan. Before submitting an application to the Fund, the lender prequalifies the potential borrower in accordance with the Fund's requirements. Upon acceptance of a positive conclusion, the Fund sends 2 copies of the guarantee to the creditor bank

Self-test questions

1. Classification of retail loans and lending objects.

2. Determination of the solvency of individual borrowers.

3. The procedure for issuing, repaying, and analyzing the security of issued loans.

4. Consumer loan market in Kazakhstan: problems and solutions.

5. Mortgage lending: essence, principles and models of mortgage lending.

6. Infrastructure of the mortgage system in Kazakhstan.

1. Banking: Strategic Leadership. Ed. V. Platonov, M. Higgins, M., Consultbanker, 1998.

2. Banking. Textbook ed. Doctor of Economics, Professor Iskakova U.M., Almaty, Economics, 2011

3. Banking. Textbook ed. Doctor of Economics, Professor Lavrushin O.I., Moscow, 2008

4. Panova G.S. Credit policy commercial bank. M.: ICC "DIS", 2006.

5. Panova G.S. Analysis financial condition commercial bank. M.: “Finance and Statistics”, 2005.
6. Rose S. Peter. Banking management. Providing financial services. Moscow, Delo LTD, 1998

Yanov Vitaly Valerievich

doc. economy Sciences, Professor PVGUS Tolyatti, RF E-mail: [email protected]

MODERN TRENDS IN RETAIL LENDING

annotation

The current stage of formation of the domestic banking system assumes the functioning of the consumer lending market, further development retail lending system and improvement of its elements that help stimulate the population’s demand for goods and services and, as a result, increase their level of well-being and create additional impulses economic growth. Retail business is an indicator of economic stability, its progressive development, and growth real income population, increased consumption and the need for savings, volumes of attracted deposits and placed loans.

Keywords

Retail lending, overdue loans, accounts payable, categories of debtors, legislative assets for retail lending.

Retail lending in Russia is in constant development, however, its dynamics are affected by a number of factors complicating this process: problems with liquidity, an increase in overdue loans. The significant increase in non-repayments, which has been observed since the beginning of the crisis, is holding back the development of all types of retail lending. According to statistics, in the Russian banking system today about 5.5% of bank loans are not serviced by borrowers. Many loans were artificially extended, many of them bad. Overdue debt may increase as a result of the actual reflection of previously restructured loans, as well as due to the fact that according to Russian standards accounting the reporting reflects late payments, not the amount of the loan itself.

If borrowers do not repay the debt, the bank is forced to pay attention to the property pledged. Obtaining collateral for problem loan debts does not have great prospects, however, is an inevitable process. Entering the borrower’s capital through collateral is a necessary measure for the bank, since large loans secured by a pledge of securities and assets, which are subject to foreclosure in the event of debt. Repayment of the loan provided to the borrower is one of the main tasks of the bank, obtaining collateral instead of Money- an extreme and undesirable measure. In conditions of increasing economic turbulence, it is unlikely that the bank will be able to quickly sell the pledged property, therefore, its assets will include a bad loan.

Non-core assets are among the most unpopular in the banking environment. In the current market conditions, the sale of collateral is a rather problematic procedure, which consists in the possibility of selling collateral only at a discount, and only banks that are not experiencing a liquidity shortage are ready for this. In such a situation, banking institutions are forced to manage the received property, but few commercial banks have the resources for such activities, having suitable infrastructure for managing non-core assets, the existence of which is justified by the volume of the potential collateral mass.

At credit debt of a short-term nature, it is possible to restructure the loan, helping to reduce the credit burden for the period while the borrower is in a difficult situation and is looking for ways to solve his debt obligations - new job, additional sources of income, solving issues of volume reduction monthly payments. One example of debt restructuring is to establish for the borrower grace period for interest payments: small monthly payments are established and interest payments are postponed to the end of the term

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loan repayments. The specific amount of the preferential payment depends on many factors: the amount of the loan, the circumstances in which the borrower is, family composition, the number of dependents, the ratio of debt and the value of the collateral. A borrower who is in arrears, but is trying in good faith to fulfill his debt obligations, cannot pay off the accumulated penalties; as a result, in fact, he works only to pay penalties and, partially, to pay interest. Based on this, the procedure for canceling fines can be considered one of the ways to restructure debt, since the system of high fines is aimed at ensuring payment discipline of borrowers. As a result of the crisis in the economy, overdue debt began to increase. accounts payable, the main reason for which is not the discipline of borrowers, but the result of loss of work and income. Therefore, a more effective option is a unified approach to reducing or complete abolition fines

The increase in the share of problem debts contributed to an increase in the cost of loans provided by banks. The increase in interest rates on loans will be explained by the complex economic situation, rising funding costs, increased risks of non-repayment. The vector of banks' activities has changed - from lending to attracting resources. Banks have significantly limited the scope of issuing new loans. The main task of credit institutions in modern conditions is to maintain the loan portfolio at the proper level. The desire to minimize the risk of loan non-repayment in most banks has led to stricter requirements for borrowers. As a result, the number of applications from potential borrowers decreased significantly. Banks lend only to reliable clients and borrowers approach the issue of borrowing more carefully. The most common reason for refusal of a loan is the field of activity of a potential borrower engaged in sectors of the economy most affected by sanctions. Banks' priorities have changed salary clients and employees of large state-owned companies. For credit institutions, the ideal client is a borrower between the ages of 25 and 55, with income officially confirmed by a 2-personal income tax certificate, with at least a year of experience at the last place of work, as well as with a positive credit history: the more guarantees the borrower offers the bank, the higher the probability of getting a loan and the lower interest rate on it.

Credit institutions in general are changing their approach to retail lending: they are moving to personal risk assessment and personal pricing. There was a need to create credit products, segmented by customer type, in which the price is determined by the level of risk, that is credit rate depends on the client - he is given either a discount or a premium. This is a new, general trend in the retail lending market.

Each new generation is separate retail product focuses on a narrower segment of consumers, increasing the commercial risk associated with the fact that consumers will not accept the new banking product, or the capacity of the market “niche” has been incorrectly assessed. In the current conditions, banks are moving from aggressively attracting new clients to retaining them and focusing on their current needs. Long-term partnerships are coming to the fore, requiring a complete restructuring of the sales of banking products. Russian banks are currently focusing on internal sources funding retail businesses, to form their liabilities through the provision of services to individuals, thereby increasing their own deposit base. Banks that offer up-to-date products based on technology and market conditions that meet the needs of banking clients in modern conditions win. Banking products can no longer remain universal; following the needs of clients, they are becoming more and more segmented, aimed at satisfying one or another need of a specific client segment.

For individuals, the size of the bank is of particular importance, which becomes a kind of reliability criterion, since the deterioration of market conditions in the banking segment, systemically important banks, whose role in the economy is significant, can count on support from the state. This applies to both federal and regional banks. Credit institutions with a developed regional network receive additional competitive advantages V retail business. In their activities, banks have become more selective not only in what they offer

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products, but also in lending by region: in some areas lending has resumed, in others - the number of approved loan applications tends to zero. Traditionally depressed regions or cities with city-forming enterprises are high-risk, since it is unlikely that a borrower from these regions will be able to improve their financial situation in a short time if they lose their job.

The problem of preventing overdue debt and working with it is one of the most pressing for Russian banks. Banks are forced to look for ways to improve the efficiency of their activities, in particular - to intensify work on the return of problem loans, look for new forms of loan repayment, and cooperate with collection agencies, whose main activity is debt collection. The emergence of a need for professional collection services and, accordingly, the emergence of agencies is caused by the rapid growth of consumer lending and the beginning of the formation of a culture of living in debt.

Borrowers who have not paid their financial opportunities: the borrower has lost his source of income, becoming insolvent;

Borrowers without a stable income who took advantage of the situation of banks issuing loans without proper verification, these include: people with deviant behavior - alcoholics, drug addicts, mentally unstable people, scammers;

Debtors who, taking advantage of shortcomings in the legislative system, do not repay the debt, although they acknowledge the fact of delay, are in a state of personal default, without work, a source of income and property. In such cases, the case is sent to court, and a decision is made on the impossibility of collecting

In different regions, the ratio of the above categories of defaulters is not the same, a trend is emerging: than worse bank checks potential borrowers, the more borrowers of the second and third categories. To reduce the share of overdue debt, banks need to verify borrowers and use bureau information credit histories. To ensure repayment of the issued loan and reduce the likelihood of overdue debt, the lender uses various mechanisms, including a preliminary analysis of the borrower’s credit history. It is highly likely that his past payment history is an indicator of future behavior. Thus, credit history bureaus can reduce the size of information asymmetry between the lender and the borrower and reduce its negative impact on the financial sector of the economy; as a result, overdue debt in the banking system is reduced and loan defaults are reduced.

Currently, there are certain difficulties in retail lending, but without retail services, banking sector there will be no full-fledged activity. There is a problem of a general increase in the cost of capital and funding, and on the other hand, an increase in the level of risks in the banking system, especially in retail lending, which together leads to a tightening of lending conditions and adjustments to banking products for individuals. Against the backdrop of declining volumes loan portfolios the share of overdue debt is growing, the level of capital adequacy is decreasing. For retail lending, all these factors contribute to reducing profitability.

The development of the retail lending market is influenced by weak legislative regulation, lack of necessary law enforcement practice, and low culture of consumer lending to the population, which create certain risks for the stability of the credit market. Economically developed countries questions retail loan regulated in sufficient detail by law and clearly defined by existing practice. In the USA, the relevant relations are regulated both at the federal level (by acts such as the Consumer Credit Protection Act, Truth in Lending Act, Fair Credit Reporting Act, Fair Credit Billing Act, Equal Credit Opportunity Act, The Fair Credit Debt Collection Act), as well as the relevant state laws. In the countries of the European Community (EU)

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Directive 2002/65/EC on the unification of legislation in the field of consumer credit and national legislation of EU member states is in force.

Currently, the relationship between the borrower and commercial bank V Russian Federation are determined by a number of general rules contained in the Civil Code, Federal law"About banks and banking", Law "On the Protection of Consumer Rights", "On Consumer Credit". The question of whether the provisions of the Law of the Russian Federation “On the Protection of Consumer Rights” applies to consumer lending relations remains quite controversial. Adopted amendments it is stipulated that when providing a loan, information about the services provided to the consumer must necessarily contain information about the size of the loan, the full amount to be paid by the consumer, and the repayment schedule (clause 2 of Article 10 of the Law). Thus, the Law formulates a rule that directly applies to consumer lending relationships. At the same time, this norm regulates only the informational aspects of these legal relations; their substantive side still largely remains outside of legislative regulation. This gives rise to a number of legal problems, without solving which the further development of consumer lending is difficult, for example, the completeness of the procedure for providing the borrower with information about the conditions under which a consumer loan agreement is concluded. When composing standard texts loan agreements banks actively use references to internal regulatory documents of a credit institution, which define a number of essential terms of the agreement, such as measures of liability of the borrower for improper performance of obligations under the agreement, including the amount of the penalty and the procedure for its calculation; the bank’s right to increase the amount of interest paid, the amount of payments by the borrower in favor of third parties under related agreements, etc. A natural consequence of insufficient and untimely information to individuals about the conditions for obtaining and repaying loans issued by banks has become an increase in the number of borrowers who are unable to repay their debt to bank - creditor.

In accordance with Art. 810 of the Civil Code of the Russian Federation, the borrower is obliged to return the loan amount received to the lender on time and in the manner prescribed by the loan agreement. Within the framework of credit relations, the condition on the repayment period agreed upon by the parties is essential, and the amount of the loan provided at interest can be repaid ahead of schedule only with the consent of the lender (upon payment monetary compensation, agreed upon by the parties).

Thus, the further development of retail lending, the reduction of financial and legal risks associated with non-repayment of provided funds involves ensuring parity of rights and obligations of the parties under loan agreements, a balanced mechanism for protecting the interests of both consumers of financial services and organizations providing them, consolidating the principles of transparency and ease of fulfillment of their obligations by borrowers. Only in this way can it be achieved total balance interests arising in the relationship between the debtor and the creditor throughout the entire term of the consumer loan agreement. List of used literature:

1. Civil Code Russian Federation. Federal Law No. 51

2. On banks and banking activities Federal Law No. 395-1

3. On the protection of consumer rights. Federal Law No. 2300-1

4. On consumer credit (loan) Federal Law No. 353

5. Bogdanova Y. What reasons are slowing down the consumer lending market / Y. Bogdanova // URL: http: www.allcredits.ru/1/13104/

6. The growth of the consumer lending market in Russia is associated with the solution of current problems, without solving which it is impossible to achieve its progressive development // Journal of loans: Bank-client.gi - URL.: http://www.bank-klient.ru/stat /about/2007/11/14 about,213.html

7. Alekseev M.Yu. Problems of development of the Russian banking system during the crisis period. / M.Yu.Alekseev // Banking. - 2009, No. 5 - p.23-25

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8. Zverev A.V. Problems of development of the Russian banking system and measures to overcome them. /A.V. Zverev // Money and credit, 2008 No. 12, p. 10-21

9. Dokuchaeva E. Collection business in Russia: work in a crisis / E. Dokuchaeva // Plas.-2009, No. 6-URL. :http://www.plusworld.ru/journal/page 162-1201.php

1. Classification of retail loans

2. Mortgage lending

3. Housing Construction Savings Bank of the Republic of Kazakhstan

Purpose of the lecture– developing students’ skills in mastering the organization of the retail lending process

Keywords– Retail loans. Mortgage credit lending. ZhilStroySberBank of Kazakhstan.

Theses ( short summary) lectures

There are several various types lending to individuals.

Classification consumer loans carried out according to intended purpose(i.e., according to the purpose for which the funds are issued) and by the term of the loan (for example, a loan repaid in installments or in a lump sum at the end of the loan term).

Loans issued to individuals and families can be divided into two groups.

One of the important and promising directions towards the creation of an effective housing finance mechanism that will ensure comprehensive solution The housing problem in the country is long-term mortgage lending to the population.

You can select two main models housing lending , widely represented in various countries:

1. “savings bank” model;

2. “mortgage company” model.

Savings banks accumulate their funds primarily through deposits. Mortgage companies do not take deposits, and initial operations are financed by equity and urgent loans.

According to analysts, a successful solution housing issue The majority of the population of the Republic of Kazakhstan is justified by a number of circumstances:

− effective development of the domestic construction industry as a whole;

− increased competition and development of the primary housing market and, as a consequence, a slowdown in the growth of real estate prices;

− prospects for legalization and a significant increase in real incomes of citizens;

− development and improvement of the regulatory framework governing real estate transactions;

− increasing the terms and reducing the interest rate on mortgage lending.

Organization of the mortgage market of Kazakhstan on modern stage presented in diagram 1.

The procedure for obtaining a residential mortgage loan under the program of the Kazakhstan Mortgage Company consists of the following stages:

1. Borrower prequalification. At this stage, you can obtain all the necessary information about lending conditions, rights and obligations, and assess the possibilities of obtaining a mortgage loan.

2. Choosing a home (if you receive a loan to purchase it).

3. Conducting an assessment of the selected housing. The assessment of the selected housing is carried out by an independent appraiser with a state license.

5. Conclusion of contracts:

6. Carrying out settlements with the home seller.

7. Insurance of purchased housing for the first year.

8. Conclusion of a mortgage agreement and its state registration in the Real Estate Center.

In addition, a mandatory condition for the provision of a mortgage home loan is to insure not only the purchased home, but also the life and ability to work of the borrower. Thus, the development of mortgages significantly stimulates the insurance services market.

It should be noted that loans that comply with CFC standards are risk-weighted at 50% when banks calculate capital adequacy ratios, while other mortgage loans are weighted at 100%. As a result, today, even under independent programs, banks strive to issue loans that are close to the Company’s standards.

Mortgage housing loans under the State program are issued to citizens for the purchase of affordable housing, the cost of which will not exceed the equivalent of 350 US dollars per 1 sq. m. m. on the terms and in accordance with the basic requirements of KMC JSC for mortgage housing loans. Mortgage lending under the State Housing Program is carried out in all regions of the Republic.

Mortgage loans are issued on the following conditions:

1. Interest rate – 10% (fixed for the entire loan term)

2. Loan currency – tenge;

3. Down payment - at least 10% of the cost of housing;

4. Loan term – up to 20 years;

The procedure for the implementation of affordable housing under the State program is regulated by the rules for the implementation of affordable housing by local executive bodies approved by Government Decree (No. 923 dated September 1, 2004).

In accordance with the Rules, citizens of the Republic of Kazakhstan wishing to purchase affordable housing under the State program must submit an application to Authorized body to include applicants in the official list. The generated lists and information about the housing for which these citizens are applying are sent to the partner banks of KMC JSC within 3 (three) working days. After receiving the lists, partner banks, within 12 working days, determine the solvency of citizens of the Republic of Kazakhstan and, within 2 working days after determining solvency, submit to the Authorized Body the names of citizens to whom partner banks plan to provide a mortgage loan, which makes a decision within 3 working days on the sale of housing to citizens whose solvency is confirmed by the lender. The priority right to purchase housing is granted to:

1. Young families with children;

2. Employees of government bodies and institutions supported by funds state budget;

3. Employees state enterprises social sphere.

After making a decision on the sale of housing, the Authorized Body and a citizen of the Republic of Kazakhstan, within 2 working days in the manner established by the legislation of the Republic of Kazakhstan, enter into a purchase and sale agreement, after which a bank loan agreement is concluded between the borrower and the partner bank.

The partners of Kazakhstan Mortgage Company JSC are the following banks:

1. JSC "Bank "Caspian"

2. JSC "Valut-Transit Bank"

3. JSC "BTA Mortgage"

4. Kurylys Ipoteka LLP

5. JSC "Bank CenterCredit"

6. Temirbank JSC

7. JSC "Alliance Bank"

8. Tsesnabank JSC

9. JSC "ATFBank"

10. JSC "Bank TuranAlem"

11. JSC " National Bank Kazakhstan"

12. JSC "Kazkommertsbank"

13. JSC "TEXAKABANK"

14. JSC "Industrial Bank of Kazakhstan"

15. JSC "Astana-Finance"

16. JSC "DANABANK"

17. JSC "Nurbank"

To finance housing mortgage lending programs and reduce the cost of loans for the population, it was planned to develop the mortgage bond market - a source of investment in the mortgage lending system. The difference between mortgage bonds and others financial instruments is the presence of direct collateral in the form of a pledge of the Company's claims on mortgage loans, which makes the bonds highly reliable as an investment object.

Moreover, this pledge is registered by the Company in accordance with the legislation on registration of pledges movable property. The mortgage pool is subject to constant monitoring by the Bondholders' Representative and an independent auditor, who check not only whether the quality of the collateral meets the declared standards, but also how much the value of the collateral covers the Company's obligations under the bonds. Kazakhstan was the first among the CIS countries to place mortgage bonds in November 2002.

Under the Special Program within the framework of the current KMC Mortgage Lending Program, the initial payment on mortgage loans will be reduced to 10%, subject to mandatory guarantee by KMFGIC JSC.

1) proper fulfillment of the established requirements of the Fund and the General Agreement;

2) timely and high-quality underwriting of mortgage loans;

3) informing borrowers about the possibility of obtaining guaranteed mortgage loans;

4) providing the Fund with the opportunity to unhindered verification of information and documents related to the guaranteed mortgage loan;

7) timely submission of other information to the Fund in accordance with these Rules and the terms of the General Agreement;

8) fulfillment of other requirements provided for by the legislation of the Republic of Kazakhstan.

The Fund provides the lender with all documents related to guaranteeing the mortgage loan.