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Household debt service ratio in a developing economy: borrower-based analytical tools and macroprudential policy overview in Kazakhstan

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Abstract

In this paper, we provide an in-depth overview of key macroprudential policy framework instruments and borrower-based analytical tools in Kazakhstan. We estimate the debt service-to-income ratio (DSTI) for household sector in Kazakhstan for the period between 2013Q2 and 2022Q1. We use the actual remaining maturity and the interest rate for each loan available from the micro-level database (credit registry), and also assume gradual repayment of debt over the time of its remaining maturity. In addition, we specify four types of aggregate income in Kazakhstan. We conjecture, that measuring DSTI with household disposable income approach is likely to provide an upper bound estimate, while calculating debt service-to-income ratio adjusting for the average monthly nominal salary per one employee will likely provide a lower bound assessment.

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Data available upon request from the authors.

Notes

  1. https://www.federalreserve.gov/newsevents/testimony/bernanke20070328a.htm.

  2. 2Joint Resolution of the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market and the National Bank of the Republic of Kazakhstan dated May 5, 2020 “On Approval of the Rules on Loans of Last Resort provided by the National Bank of the Republic of Kazakhstan”.

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Acknowledgements

The views expressed in this article and other content are those of the authors and do not necessarily reflect the position of the National Bank of Kazakhstan. We acknowledge the feedback from the internal research workshop participants at the National Bank of Kazakhstan. We wish to separately thank Akylzhan Baimagambetov, Vitaliy Tutushkin, Sabit Khakimzhanov, Olzhas Kubenbayev, Dinara Tazetdinova, Ruslan Valinurov, Farkhad Alimbayev and all our colleagues from the Financial Stability and Research Department of the National Bank of Kazakhstan who made valuable comments and suggestions on the final version of the manuscript. All remaining errors are our own.

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The authors declare that no funds, grants, or other support were received during the preparation of this manuscript.

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Authors and Affiliations

  1. National Bank of Kazakhstan, Astana, Kazakhstan

    Zhandos Ybrayev, Andrey Talakin, Yerlan Kairullayev & Talgat Zharkynbay

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  1. Zhandos Ybrayev
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  2. Andrey Talakin
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  3. Yerlan Kairullayev
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  4. Talgat Zharkynbay
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Contributions

All authors contributed to the study conception and design. Material preparation, data collection and analysis were performed by YK and TZ. The first draft of the manuscript was written by ZY and AT and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

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Correspondence to Zhandos Ybrayev.

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Ybrayev, Z., Talakin, A., Kairullayev, Y. et al. Household debt service ratio in a developing economy: borrower-based analytical tools and macroprudential policy overview in Kazakhstan. J Bank Regul 25, 58–72 (2024). https://doi.org/10.1057/s41261-023-00218-7

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