ALMATY – Kazakhstan is preparing to establish a national credit rating agency as part of a broader effort to develop its domestic capital market, but the institution’s success will ultimately depend on more than the creation of a new regulator-approved rating system.
Its ratings will have to earn the confidence of investors and become a meaningful part of how companies are financed and risks are priced. The new Law On Credit Rating Activities, signed by President Kassym-Jomart Tokayev on July 23, introduces common rules for credit rating agencies operating in Kazakhstan and provides for the establishment of a Kazakh rating agency, with the National Bank among its founders.
The law sets requirements for capital, corporate governance, internal controls, conflict-of-interest management and disclosure. It also expands the potential scope of rating activities beyond conventional credit ratings to include corporate governance, Islamic finance, sustainable development and other types of ratings, while the legislation is set to take effect on Oct.
21, with some provisions coming into force on July 1, 2027. But the central question is not simply what the new agency will do. It is why Kazakhstan needs one in the first place, and whether it can change the way capital is allocated in the domestic economy. Kazakhstan already has access to the world’s major rating agencies.
The new institution is therefore not intended to replace international players or create a domestic version of S&P, Moody’s or Fitch. Ruslan Sultanov. Photo credit: digitalbusiness.kz “Creating a national credit rating agency is not an attempt to make a Kazakh equivalent of S&P, Moody’s or Fitch, and certainly not a task of replacing international agencies.
International ratings will retain their importance,” a leading Kazakh economist Ruslan Sultanov, who served as Chairman of the Board of the highly respected Economic Research Institute from 2019 to 2024, told the Astana Times. The rationale is instead connected to the structure of the domestic financial market.
Kazakhstan has been seeking to develop non-bank financing, corporate bonds and institutional investment. Yet a functioning capital market requires investors to be able to distinguish between borrowers according to their level of risk. According to Sultanov, this is particularly relevant for medium-sized companies.
An international rating may make economic sense for a large corporate borrower seeking substantial financing or access to international capital markets. For a smaller issuer, however, the cost and requirements associated with obtaining such a rating can become disproportionate to the size of the planned issue.
“As a result, a gap arises: there is a potential issuer, institutional investors have money, but there is often no independent and understandable market assessment of credit risk between them. The national rating scale makes it possible to solve another problem – to compare the credit quality of borrowers within a single jurisdiction in much greater detail than the global scale allows,” he said.
The distinction is important. A domestic rating system does not necessarily need to compete with international ratings. Its value could instead lie in providing more granular information about relative credit quality within the Kazakh market. Ratings do not create liquidity on their own