Stabilization of its financial sector remains an important condition for stimulating country’s economic growth. To ensure the stability of the entire financial system, the governmet has developed a package of response measures during the period of crisis, including a number of tools that stimulate the effectiveness of financial institutions, including a mechanism for rehabilitating the banking sector in order to minimize the level of non-performing loans in the loan portfolio of banks.
The creation of the Fund – is one of the government measures aimed at ensuring the stability of the financial system and economy. In 2012, the National Bank established the Fund in order to implement the Law of the Republic of Kazakhstan "On amendments and additions to certain legislative acts of the Republic of Kazakhstan on the regulation of banking activities and financial organizations in part of risk minimization".
The function of the Fund is to implement measures aimed at improving the quality of the loan portfolio in the banking sector by acquisition of non-performing assets of banks, managing these assets and involving them into economic turnover.
The National Bank managed the Fund until 2017. In 2017, the Fund was transferred to the jurisdiction of the Government represented by the Ministry of Finance in order to implement the assignments of the Head of State indicated in the Address to the people of Kazakhstan dated January 31, 2017, as well as on the basis of resolutions of the Board of the National Bank dated February 21, 2017 No. 27 and the Government dated 4 April 2017 No. 167 "On some issues of the Problem Loans Fund" Joint Stock Company”.
Thus, the only shareholder of the Fund is the Government.
The Fund's activities are based on international experience in managing distressed assets - restructuring, debt collection, sale of assets.
Strategic directions of the Fund's activities for 2017-2027
1) Rehabilitation the banking sector;
2) Involvement of the purchased assets into the economic turnover.
Within the first direction, the Fund uses mechanisms of direct acquisition of non-performing assets, direct acquisition with simultaneous sale, and other areas of cooperation with banks and legal entities that had previously appeared as banks, including conditional financing of banks.
As part of the second direction, the Fund carries out activities for asset management through (1) restructuring, (2) collecting debt on righs to claim, as well as (3) selling property of the Fund and its subsidiaries.
The Fund carries out restructuring of debt on the rights to claim in order to ensure the repayment of debt and the improvement of the activities of debtors (borrowers) on terms that take into account the ability of debtors to fulfill their obligations (reduction of the interest rate, change in repayment schedules, prolongation of maturities, writing-off of part of the debt).
The Fund carries out collection procedures in accordance with the current legislation on the righs to claims for which there is no expediency of debt restructuring, - these are claims actions, enforcement proceedings and bankruptcy.
The main way to sell the assets of the Fund is through open electronic trading based on their market value on the trading platform of “Information and Accounting Center” JSC under the Ministry of Finance.