Banks in Kazakhstan are cutting back on lending to the construction sector out of concern over the stubborn rate of defaults among homebuyers, according to research published by economic monitoring agency Energyprom.kz.
The lack of available credit threatens to gravely undermine an ambitious government program launched this year to provide affordable housing to hundreds of thousands of families in the coming decade.
At the end of March, the volume of outstanding banking loans to the construction sector stood at 961 billion tenge (more than $3 billion), which is 3.8 percent down from the same period a year earlier. That marks a long-term trend. Over the past three years, credit to construction has shrunk by 34 percent. As a percentage of overall credit in the economy, the share extended to construction has dropped in that timeframe from 12 percent to 7.7 percent.
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