The activities of pawnshops are regulated by the Law of the Republic of Kazakhstan "On Microfinance Activities" and other legislative acts of the Republic of Kazakhstan.

A pawnshop is established in the organizational and legal form of a company or partnership.

It is essential that the name of the pawnshop includes the word "pawnshop".

A legal entity applies to the authorized body (the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market, hereinafter - the Agency) for obtaining a license to carry out microfinance activities within six months from the date of its state registration (re–registration) with the "Government for Citizens" State Corporation as a pawnshop.

A legal entity intending to open a pawnshop shall notify the Agency, the authorized government agency responsible for financial supervision, of its state registration (re-registration) with the "Government for Citizens" State Corporation as a pawnshop within ten calendar days from the date of such registration.

The procedure for granting a license, the requirements for senior employees and founders (participants) of a pawnshop, as well as the grounds for refusing to grant a license to a legal entity are established by the Law of the Republic of Kazakhstan "On Microfinance Activities".

In order to obtain (or re-issue) a license to operate a pawnshop, in addition to the documents specified by the Law of the Republic of Kazakhstan "On Permits and Notifications", the pawnshop submits to the Agency documents confirming compliance with the qualification requirements for licensing the activity of a pawnshop in the cases specified by the Rules for Licensing Microfinance Activities.

In accordance with the Licensing Rules (Resolution of the Agency's Board No. 108 as of November 23, 2020), in order to obtain a license to operate a pawnbroking business, an applicant submits an application for a license and relevant documents to the Agency. Documents are submitted electronically through the e-Government portals: www.egov.kz and www.elicense.kz.

         In the license application, the pawnshop must provide information on the fulfilment of the following qualifying conditions:

• availability of an information system that provides automation of accounting;
• accession to the single information system in the field of combating the legalisation (laundering) of the proceeds from crime and the financing of terrorism;
•  conclusion of an agreement on the provision of information to
  a credit bureau with state participation.

The inclusion of this information in the application means that, prior to submitting the application, the pawnshop has ensured the availability and functioning of the necessary information systems, which allow, inter alia, interaction with the authorized body in the field of combating the legalisation (laundering) of the proceeds of crime and the financing of terrorism and with the credit bureau.

The minimum amount of the pawnshop's authorized capital is determined by Resolution No. 192 of the Board of the National Bank of the Republic of Kazakhstan as of November 14, 2019 "On Approval of Prudential and Other Mandatory Standards and Limits for Microfinance Organisations, as well as Methods of their Calculation".

The Agency verifies the completeness of the submitted documents, as well as information confirming compliance with the qualification requirements, including for the managers and founders (participants) of the pawnshop (higher education and impeccable business reputation, absence of outstanding or serious criminal record, corruption offences).

The public service delivery result is the sending of a notification on the granting of a license or a substantiated refusal to grant it within thirty working days from the date of receipt of the complete package of documents.

In accordance with paragraph 1-1 of Article 3 of the Law of the Republic of Kazakhstan "On Microfinance Activities", a license to carry out microfinance activities entitles pawnshops to grant microloans to individuals, secured by movable property intended for personal use, for a period of up to one year in an amount not exceeding eight thousand times the monthly calculation index established for the relevant financial year by the Law on the Budget of the Republic of Kazakhstan.

In addition, according to paragraph 1-3 of Article 3 of the Law of the Republic of Kazakhstan "On Microfinance Activities", pawnshops have the right to accept, store and sell jewellery containing precious metals and precious stones.