Household debt service ratio in a developing economy: borrower-based analytical tools and macroprudential policy overview in Kazakhstan

In this paper, we provide an in-depth overview of key macroprudential policy framework instruments and borrower-based analytical tools in Kazakhstan. We estimate the debt service-to-income ratio (DSTI) for household sector in Kazakhstan for the period between 2013Q2 and 2022Q1. We use the actual remaining maturity and the interest rate for each loan available from the micro-level database (credit registry), and also assume gradual repayment of debt over the time of its remaining maturity. In addition, we specify four types of aggregate income in Kazakhstan. We conjecture, that measuring DSTI with household disposable income approach is likely to provide an upper bound estimate, while calculating debt service-to-income ratio adjusting for the average monthly nominal salary per one employee will likely provide a lower bound assessment.