Crowdfunding in Kazakhstan: current state and market prospects

Crowdfunding worldwide has long been synonymous with the collective financing of innovative projects and creative ideas. However, in Kazakhstan, this sector is currently developing according to its own unique rules, remaining primarily at the level of crowd-lending — where many people invest funds in exchange for a fixed interest rate. Let’s explore why this is happening, who is currently operating in the market, and why, despite all the challenges, the potential for local crowdfunding is enormous.

Ayaulym Ayaganova, city — Astana, financier, co-founder and CEO of Acvee Finance, board member of TechnoWomen, head of the technical women’s entrepreneurship group, Instagram

Loans at 36% per annum: what is the reason for their popularity

Instead of raising funds for the release of a new gadget or the first batch of goods, as is done on foreign platforms, the majority of transactions in Kazakhstan are loans to businesses. Simply put, a company or individual entrepreneur takes a loan at interest, and investors expect to receive up to 36% per annum.

1. Regulators' tolerance for crowd-lending
   In Kazakhstan, legislation is currently better structured for the clear form of "loan — repayment with interest" than for equity or convertible investing. Therefore, crowd-lending "fits" into current regulations more easily than, for example, selling shares in a startup.
   
2. Opportunity for quick returns
   36% per annum sounds attractive to private investors, especially since alternatives with similar yields are either associated with high risk or are not available to a wide range of investors. As a result, crowd-lending appears to be a convenient earning tool with a reasonable assessment of risks.
   
3. Clarity of the scheme
   For a person unfamiliar with the intricacies of corporate law and venture capital terminology, it is easier to understand: "I lend money — I get it back + interest." Selling shares, dividends, valuing startups using multiples — all of this is far less transparent for the average co-investor.
   

What limits the development of other forms of crowdfunding

1. Strict regulation
   As financial technologies gain momentum, supervisory authorities begin to introduce additional requirements. In Kazakhstan, the International Financial Center (IFC) has a significant influence, as it is responsible for regulation in certain cases and can tighten norms. This sometimes makes launching new forms of crowdfunding quite difficult.
   
2. Low awareness
   There are currently only a few platforms operating in the crowd-lending format in the country, and few people know about them. The reason is the lack of "loud publicity": operators do not promote themselves as actively in the media field, and state structures have not yet brought this topic to the forefront.
   
3. Legal nuances
   Equity and convertible investing require more complex legal structures: issuing share capital, concluding SAFE or Convertible Note agreements, and so on. In the local legal field, this is not always simple, and many entrepreneurs/investors prefer to choose a clear loan rather than delve into the terminology.

Why the potential is still high

1. Growing interest in alternative investments
   Each year, the number of people willing to diversify their portfolios increases. Bank deposits, real estate, and gold are classics, but a new generation of investors is emerging, seeking projects with more interesting yields and meaning.
   
2. Support for small and medium-sized businesses
   Crowdfunding has historically been considered a tool that can give companies and startups a "initial push." In Kazakhstan, the SME sector often suffers from a shortage of accessible credit instruments. Crowd-lending addresses this pain point and is becoming increasingly attractive to entrepreneurs.
   
3. Opportunity to reach the global level
   Even if current forms of crowdfunding in Kazakhstan are limited to loans, nothing prevents companies from moving forward. As the legislative base liberalizes, new platforms appear, and experience accumulates, more local projects will begin to adopt international tools. Successful cases show that global platforms are achievable for Kazakhstani startups as well.
   
4. Legacy of major crowdfunding projects
   There are many examples worldwide where crowdfunding grew to billion-dollar valuations and IPOs. Their experience inspires and encourages the creation of local and regional analogs adapted to local specifics.

What to expect in the coming years

— consolidation of crowd-lending: interest-bearing loans will likely continue to dominate, as this is the simplest and most understandable form for both regulators and a wide range of investors

— gradual liberalization: with growing interest in FinTech, there may be legislative initiatives allowing for safer and easier placement of equity instruments or convertible notes

— increase in the number of platforms: although there are few today, the situation will change. Competition will force projects to come out of the "underground" and talk about themselves more actively

— more public stories: the market cannot grow without the success of specific crowdfunding campaigns. The emergence of "role models" — companies that managed to raise significant funds and return profits to investors — could multiply the audience.

Conclusion

Yes, Kazakhstan cannot yet boast the same diversity of crowdfunding instruments as the United Kingdom or the United States. But our market is forming quite quickly. If today most transactions are interest-bearing loans, tomorrow we may see an explosion of interest in equity crowdfunding or convertible loans — especially if regulatory barriers ease and FinTech companies continue to seek non-standard solutions.

Here, as in any young sector, the slogan "Where there's a will, there's a way" is useful. Potential investors willing to risk for high yields and support of local business exist. Entrepreneurs who urgently need financing also exist. And if both camps begin to find each other more often, crowdfunding in Kazakhstan will enter a new orbit, becoming a true driver for local startups and small businesses.