Thirty-three years ago, imagining Kazakh CEOs, fintech pioneers, government officials, and banking leaders gathering in New York City to discuss Kazakhstan’s financial evolution would have seemed far-fetched. In 1991, Kazakhstan lacked its own currency, operating under monetary rules dictated by the Central Bank of Russia. The country’s banking system was rudimentary, dependent on a few traditional banks, with little diversity or competition. Economic reforms were nascent, privatization was contentious, and the creation of a Kazakh stock market faced major hurdles.
Fast forward to 2024, and Kazakhstan boasts a rapidly evolving financial sector driven by digital transformation and innovation. Fintech giant Kaspi.kz made headlines with a successful Nasdaq IPO and has since expanded its reach by acquiring a majority stake in Turkey’s leading e-commerce platform, Hepsiburada. Emerging fintech leaders like S1lkPay, a certified Mastercard technology partner, further highlight the sector’s dynamism.
A key player in this transformation is the Astana International Financial Center (AIFC), an advanced financial hub that has attracted global businesses and investors. The Astana International Exchange (AIX) has seen trading volumes surpass $2 billion since its 2018 launch, with $1 billion traded this year alone. These developments showcase Kazakhstan’s integration into global financial markets and its emergence as a dynamic destination for investment and innovation.
Key Developments Highlighted at Kazakhstan Finance Day
Kazakhstan Finance Day, held on October 28th in New York City, brought together prominent leaders from Kazakhstan’s financial sector. High-profile attendees included Mikhail Lomtadze, CEO of Kaspi.kz, Umut Shayakhmetova of Halyk Bank, Timur Turlov of Freedom Holding, and officials from the National Bank of Kazakhstan and the Agency for Regulation and Development of Financial Markets.
While the forum celebrated the sector’s achievements, it also raised questions about challenges that persist:
•Small Sector Size: Despite progress, Kazakhstan’s financial sector remains modest relative to its vast size and resource wealth.
•Banking Dominance: Banks represent over 60% of GDP, with non-banking institutions contributing only 4% and the insurance sector 2%.
•Limited Credit Access: Bank credit accounts for just 20% of GDP—lagging behind peers, according to the World Bank.
Future Financial Growth Requires Reform
Under President Kassym-Jomart Tokayev, Kazakhstan aims to double GDP by 2029 and join the top 30 global economies by 2050. Achieving this ambitious goal requires substantial capital investment, efficient capital allocation, and a diverse financial system. The World Bank stresses that Kazakhstan must adopt structural reforms to support economic diversification, energy transition, and climate resilience.
One initiative leading this transformation is the Baiterek National Holding Company, which is promoting over 700 investment projects valued at $28 billion. However, broader financial reforms are essential to mobilize private capital and create a resilient, growth-oriented economy.
Addressing Risks and Challenges
Kazakhstan faces global macroeconomic uncertainties, including inflation, oil price volatility, and geopolitical risks such as Western sanctions on Russian bank subsidiaries operating within the country. Internal challenges, like slow reforms in education and limited investor confidence, could also hinder economic growth.
The proposed new banking legislation, announced by President Tokayev, aims to modernize the sector, boost competition, and create a robust environment for fintech innovation.
Conclusion
Kazakhstan Finance Day in New York City showcased the remarkable evolution of the country’s financial landscape while acknowledging the challenges ahead. With transformative reforms, international collaboration, and private investment, Kazakhstan is poised to unlock its immense economic potential.
What will the next Kazakhstan Finance Day reveal? Only time will tell. But one thing is certain: Kazakhstan’s financial leaders are committed to driving progress and securing the nation’s place as a global financial powerhouse.
Written by: Assel Nussupova
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