Kazakh Resident Wins Appeal After Court Dismisses Microfinance Debt Claim
A resident of M. has won an appeal against a debt repayment order issued by a district court. The original ruling favoured 'MFO' LLC, requiring the resident to pay over 200,000 tenge in debt and penalties. However, the appellate court has now overturned that decision, citing critical flaws in the case.
The dispute began when the Malikha Beiseikha District Court initially declared the loan agreement void in 2021. The court ruled that the interest rates were usurious, exceeding legal limits under consumer credit law. But this judgment was later reversed on appeal because the lower court had applied the wrong legislation—consumer credit rules instead of microfinance regulations, which govern 'MFO' LLC.
The recent appellate ruling by the Civil Cases Panel of the Karaganda Regional Court went further. It dismissed 'MFO' LLC’s entire claim, pointing to a lack of evidence. The loan agreement bore only the company’s signature, with no proof that the resident had signed it or received any funds. Earlier, the district court had ordered the resident to repay 136,000 tenge in principal debt plus 70,200 tenge in penalties. The appellate court, however, found the documentation insufficient to support these demands.
The appellate court’s decision means the resident is no longer required to repay the debt. The case highlights the importance of proper documentation and correct legal application in loan disputes. 'MFO' LLC’s claim has been fully dismissed, ending the legal battle.
