Once upon a time in Mexico, the currency was cocoa beans, in Canada – the skins of valuable animals, on Oceania islands they paid with shells and pearls. However, time passed, and the necessity creating a universal exchange equivalent became more and more obvious. Therefore, in the end there was money. At first, they were gold and silver, later paper coins came into circulation and lasted until modern times, until they were largely replaced by virtual ones (newspaper article).

Our speaker is Darkhan Nurpeissov, Doctor of Law, Professor, Master of Business Administration, and Banking Ombudsman of Kazakhstan. For him money – is the point of application of professional knowledge and life experience.

THE MIRROR WILL NOT TRICK

• Darkhan Kadyrbayevich, what is money for you?
• For me, money is not just a means of material support for my loved people and myself, but also one of the important tools for the achieving specific goals and making your dreams come true. Money gives me freedom of choice and the opportunity to live in accordance with my own values. Money, is like a mirror, reflects our priorities. For some people, money becomes the main source of motivation, a symbol of social status and material success. Someone spares no money for charity, showing concern for others. In addition, for such people, money is a means of helping those in need, a reflection of their spiritual essence.
• If money could talk, what would we know about ourselves? About character, habits, attitude towards each other… In other words, what does money reveal in a person?
• Moreover, many things are responsibility and care, determination and enterprise, material ambitions or spirituality, stinginess or generosity. Money could tell: “My owner is very enterprising and carefully plans and controls his finances. He strives for the efficient use of financial resources and is ready to invest a lot of effort in achieving his goals.” Alternatively: “My owner attaches a great importance not only to material wealth, but also to the spiritual development and well-being of others. He understands - money is just one aspect of happiness.”

TRUST IN GOD…

• Why ones can get money out of the air, while another can barely make ends meet?
• The difference is due to many factors. Some may initially have access to better education, family financial resources, or other supports and connections, help them achieve financial success. In addition, others are faced with poverty, social difficulties, and personal problems, unsettle them. It depends on person himself in many cases, his character traits: hard work and perseverance, the desire for financial independence and literacy. Often people are simply lazy and do not want to develop in this regard. Moreover, sometimes - financial success depends on the luck given by the God.
• What extend us to do, Kazakh people, to know how to handle money? Some live from paycheck to paycheck, while others can save on low incomes. What is financial literacy for the average person?
• In simple words: this is the ability to plan a budget, manage money correctly, invest and make informed decisions. This also includes understanding the basics of taxation and debt management. In addition, without knowledge you cannot do it, how to plan for the immediate and long-term future, how to choose a mortgage of insurance, etc. All these points are extremely important for all citizens, as they help manage their income and expenses, avoid debts and financial problems. I often advise my loved people, friends, and students to read the book ‘The Richest man in Babylon’ written by George Clason. By the way, this will also be a very useful for readers of your newspaper. It clearly states the main principle of your newspaper. It clearly states the main principle of financial well-being: no matter how much you earn, ‘pay yourself first’. In other words, save some of this money for your future, reserve for investment. Unfortunately, our citizens are very lacking in such knowledge. A low level of financial literacy and discipline, the inability to soberly calculate one’s financial capabilities, and the desire to get everything at once are a big problem for people in Kazakhstan. People, who do not understand the principles of money management, can easily fall into debt, take out loans without studying the terms in detail, spend more than they earn, and so on. 

A TELEPHONE CAN WAIT!

• Why do debt overload occurs, the credit institutions hook, when people get into debt because of impulsive purchases?
• Yes. A loan has its own price. You know, a person rents money. However, you have to pay for it. After all, no one has any questions about the need to pay for renting an apartment. It is the same with money. Therefore, a person must really calculate his financials and risks. Moreover, before receiving a loan. For example, why people, having a salary 200,000 tenge, take a loan to buy a TV, game station or the latest model smartphone for 700,000 tenge? In order to show it to your friends? Even if the purchase is so necessary, save it up for, to show your wealth and discipline. Moreover, if a person loses his job or loses other income, then disaster is not far away. I often have to deal with the cases, where a person turns out to be to blame for his personal financial problems. Although, of course, there are various life circumstances, that are difficult to foresee … People with good financial knowledge, as a rule, make informed decisions, making plans and following them, which allows them to avoid unnecessary loans and, therefore, remain economically independent.
• Nevertheless, from time to time, the state meets debtors halfway; their debts are refinanced or even written off.
• Yes. Nevertheless, at the expense of responsible taxpayers. This money could be used to address other social needs. In addition, in my opinion, the authorized government bodies should have a task – to prevent the situation’s occurrence. And it is necessary to review the current banking legislation, including strengthening the requirements, when credit institutions issue loans to a certain citizen’s category – students, elderly people, citizens with non-permanent incomes or who have defaulted in the past and etc. It is very important not to stimulate dependent sentiments, but to promote the adoption of correct financial decisions, and understanding your responsibility for them. Financial literacy should be taught from the early childhood, in a game way, and starting in kindergarten. Parents can use a clear examples to explain to children, how to manage money, plan a budget etc. In the modern world, schools and universities should play an important role in this process, by introducing special lessons on this topic.

AHEAD OF RISKS

• How can you describe the financial system of Kazakhstan?
• A developed financial legislation, well-developed stock, foreign exchange, banking and insurance markets, and strong financial institutions: exchanges, banks, insurance companies, brokerage organizations and others, which contributes to the development of the financial sector – I would mention among the absolute advantages. In addition, there are – advanced digital infrastructure with a wide network of ATMs, online banking, mobile applications and other tools for convenient financial management. However, there are also disadvantages. Financial legislation requires further development, despite all the progressiveness. The country periodically experiences bank failures, and undermining confidence in the financial sector, as a whole.
• What is your attitude towards cryptocurrency? It is worth investing in it today.
• The attitude is generally positive. I believe in the future of digital currencies, including cryptocurrencies. Nevertheless, I would warn people, who do not have financial knowledge, sufficient free money and patience against such risky investments. In addition, you can run into scammers. Therefore, I would advise you to invest in reliable instruments: deposits, real estate, bonds, and insurance products. If your level of knowledge and experience allows, you can invest in stocks and precious metals.

BY THE WAY 

The stability of the banking sector is the basis for the development of the country’s economics. However, there are cases, when the financial regulator is forcing to revoke the licenses of banks and liquidate them. In such cases, both bank depositors and the economy, as a whole are under attack.

Over the entire period of independence, 136 banks were liquidated in Kazakhstan. In addition, more than 90% of them were liquidated before 2001 year. Stable, which has been repeatedly confirmed by international rating agencies: their analytics confirm, that second-tier banks (STBs) of the Republic of Kazakhstan have become better able to withstand crisis phenomena.

The most stable and reliable banks are large second-tier banks. Thus, the share of the 10 largest banks in the assets of STBs was 92, 4%; the share of the top 10 in equity capital was 93, 2%. The top ten banks by assets included the following banks: Halyk Bank, Kaspi Bank, Bank Center Credit, Otbasy Bank, Forte Bank, Jusan Bank, Eurasian Bank, Bank RBK, Bereke Bank and Bank Freedom Finance Kazakhstan.

The above-mentioned STBs are the largest players in the sector; and they all have sufficient amounts of equity capital. In addition, as we noted earlier, confirmation of the stability of banks is also an assessment by international rating agencies such as Moody’s, Fitch Ratings and S&P Global Ratings. Almost all of the largest second-tier banks have good ratings in the Republic of Kazakhstan.   

In general, now, the banking sector of Kazakhstan is characterized as a stable, which has been repeatedly confirmed by international rating agencies: their analytics confirm that STBs have become better able to withstand crisis phenomena of Republic of Kazakhstan.