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State programme for the financing of small and medium-sized businesses in processing industry

Small and medium-sized businesses support programme is implemented by “Baiterek” Holding and its subsidiary companies as part of the implementation of “Nurly Zhol” State programme of infrastructure development for 2015-2019. Among the major challenges of this activity are: reducing the cost of credit resources for small and medium-sized business entities (hereinafter – SME), covering a large number of SME’s through fund-raising provided by private financial institutions, debt relief of SME’s through refinancing of their existing loans, as well as increasing accessibility and efficiency of providing credit resources for SME’s through institutional and technical capacities of second-tier banks.

Passport of the programme

On April 14, 2014 at the meeting of the Government of the Republic of Kazakhstan, a common action plan was adopted with National Bank to support small and medium-sized enterprises. 100 billion tenge were allocated from National Fund of Kazakhstan within the framework of this plan in order to finance small and medium-sized enterprises that implement projects in processing industry.

 

17 апреля 2014 г. АО «Национальный управляющий холдинг «Байтерек» и его дочерняя структура АО «Фонд развития предпринимательства «Даму» подписали кредитные соглашения с 13 банками второго уровня о размещении 100 млрд. тенге для финансирования субъектов малого и среднего бизнеса в обрабатывающей промышленности. В течение шести месяцев банки второго уровня должны будут освоить эти средства для целевой группы, т.е. для предпринимателей, осуществляющих проекты в обрабатывающей промышленности. Основное направление в рамках этого плана по использованию этих средств заключается в следующем:On April 17, 2014 JSC ”National Managing Holding “Baiterek” and its subsidiary company ”DAMU” Entrepreneurship Development Fund” JSC have signed loan agreements with 13 second-tier banks on allocation of 100 billion tenge for financing small and medium-sized enterprises in processing industry. Within six months second-tier banks shall spend those funds for the target group, i.e. entrepreneurs that implement projects in processing industry.  The main direction within this allocation plan are as follows:
    •    50 billion tenge will be allocated to fund new small and medium business projects.
    •    50 billion tenge will be authorized to refinance borrowers.

 

Thus this plan will allow to achieve multiple objectives at the same time:

First of all, promotion of investments for new small and medium business projects. Secondly, it will allow to refinance projects on better terms, so that entrepreneurs could successfully execute productive activities.

Within the framework of new projects, the priority will be given to food industry, i.e. food processing projects.

Credit conditions for entrepreneurs that implement projects in processing industry:

Participants – MSE’s implementing projects in processing industry Limit of financing – up to 1 850 million tenge
Currency – tenge
Rate of return – 6% per annum
Maturity – up to 120 months
Use of proceeds – projects in processing industry

Условия кредитования для предпринимателей, реализующих проекты в обрабатывающей промышленности:

Участники – субъекты МСБ, реализующие проекты в обрабатывающей промышленности
Лимит финансирования – до 1 850 млн.тенге
Валюта финансирования – тенге
Ставка вознаграждения – 6% годовых
Срок размещения – до 120 месяцев
Целевое назначение – проекты в обрабатывающей промышленности

 

 

Credit conditions for second-tier banks through EDF ”Damu” JSC:

Currency – tenge 
Rate of return – 2% per annum 
Maturity – 240 months  
Use of proceeds – financing of MSE’s that implement projects in processing industry  
Term of assimilation – 6 months after opening a limit  
Second-tier bank margin – not more than 4% per annum 
Fees – no fees, though in case of changing of credit conditions by MSE's initiative, the fees are agreed upon with EDF ”Damu” JSC.

 

It is worth noting, that control over allocated funds from National Fund will be exercised by our Holding “Baiterek” and “Damu” Fund. State commission on modernization of RK economy will pick second tier banks, as well as distribute and redistribute funds among them. Expenditure control commission controls the specific and effective use of allocated funds and carries out quarterly report for the Head of State on following his orders.

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Reference Information on the Program Implementation as of August 01, 2019

  1. Subsidizing

Damu EDF JSC has provided subsidies for 13,941 projects in the amount of 2,517 billion tenge in 3 areas of the Program since 2010. (These include 1,432 projects supported in the total amount of loans of 173 billion tenge in 2018; 1,186 projects in the total amount of loans of 74 billion tenge in 2019).

The industry structure of subsidized projects is dominated by manufacturing industry projects (3,914 projects for a total amount of loans of 1,174 billion tenge), transport and warehousing (3,151 projects in the amount of 360 billion tenge).

Sectoral Breakdown of Subsidizing Results

Industry

Quantity of Projects, units

Amount of Loans, thous. KZT

Manufacturing industry

3 914

1 174 020 460

Transport and warehousing

3 151

359 557 594

Wholesale and retail trade; vehicles and motorcycles repairs

1 858

255 281 620

Agriculture, forestry and fisheries

1 120

136 824 787

Healthcare and social services

870

85 394 021

Accommodation and meals services

851

155 196 788

Education

587

49 157 320

Arts, entertainment and recreation

336

73 275 968

Real estate transactions

212

47 895 719

Provision of other types of services

177

6 209 187

Mining industry and development of quarries

160

44 093 774

Professional, research and engineering activities

158

9 058 503

Construction

157

14 109 602

Activities in administrative and supporting servicing

130

11 723 305

Information and communication

108

22 178 336

Water supply; sewer system, control over wastes collection and allocation

101

17 989 131

Electric power supply, gas supply, vapor and air conditioning

48

55 110 016

Financial and insurance activities

2

36 142

Activities of households hiring indoor servants and producing goods and services for personal consumption

1

55 222

Summary Total

13 941

2 517 167 493

East-Kazakhstan Oblast (1 119 projects with a total of loans worth 161 bln. tenge) and Pavlodar Oblast (1071 projects with a total of loans worth 172 bln. tenge) are leading among the regions.

Regional Breakdown of Subsidizing Results

Region

Quantity of Projects, untis

Amount of Loans, thous. KZT

Turkestan Oblast

455

74 251 645

Shymkent

463

196 555 838

Mangystau Oblast

549

82 154 051

Aqmola Oblast

709

116 786 262

Qyzylorda Oblast

725

64 803 332

Almaty Oblast

765

218 518 888

Atyrau Oblast

791

100 948 379

West Kazakhstan Oblast

810

121 496 713

Nur-Sultan

883

198 746 150

North Kazakhstan Oblast

894

97 772 343

Zhambyl Oblast

901

105 442 549

Qaragandy Oblast

918

148 894 356

Almaty

926

340 275 434

Qostanai Oblast

971

183 687 862

Aqtobe Oblast

991

133 931 529

Pavlodar Oblast

1071

171 656 766

East Kazakhstan Oblast

1119

161 245 396

Summary total

13 941

2 517 167 493

  1. Guaranteeing

Guarantees were provided in regard to 5,631 projects in the amount of loans of 211.77 bln. tenge, the volume of guarantees amounted to 86 bln. tenge. (This includes 1,191 projects supported in the total amount of loans of 49 billion tenge, the volume of guarantees amounted to 19 billion tenge in 2018; 778 projects were supported in the total amount of loans of 33.2 billion tenge, the volume of guarantees amounted to 12, 6 billion tenge in 2019).

The largest share is occupied by manufacturing industry (1,814 projects for a total amount of loans of 85 billion tenge) and wholesale and retail (1,123 projects for a total amount of loans of 26 billion tenge) sector-wise among the financed projects.

Sectoral Breakdown of Guaranteeing Results

Industry

Quantity of Projects, units

Amount of Loans, thous. KZT

Manufacturing industry

1 791

82 980 686

Wholesale and retail trade; vehicles and motorcycles repairs

1 123

26 175 178

Transport and warehousing

976

29 121 456

Agriculture, forestry and fisheries

379

16 923 812

Accommodation and meals services

303

11 316 965

Healthcare and social services

282

13 584 378

Education

234

10 506 726

Arts, entertainment and recreation

106

4 695 945

Provision of other types of services

94

1 819 416

Professional, research and engineering activities

80

3 299 947

Construction

60

2 458 105

Activities in administrative and supporting servicing

53

1 147 024

Real estate transactions

47

1 563 318

Water supply; sewer system, control over wastes collection and allocation

40

2 155 916

Information and communication

34

1 413

Mining industry and development of quarries

23

1 678 705

Electric power supply, gas supply, vapor and air conditioning

3

900

Financial and insurance activities

3

36 352

Summary Total

5 631

211 776 562

Aqtobe (446 projects with a total of loans worth 15.27 bln. tenge) and Atyrau (418 projects with a total of loans worth 12 bln. tenge) oblasts are leading among the regions.

Regional Breakdown of Guaranteeing Results

Region

Quantity of Projects, units

Amount of Loans, thous. KZT

Aqtobe Oblast

446

15 269 824

Atyrau Oblast

418

 12 059 594

East Kazakhstan Oblast

414

13 393 993

Nur-Sultan

394

20 923 804

Qostanai

379

15 143 446

Zhambyl

373

12 047 536

Pavlodar Oblast

369

12 914 654

Almaty Oblast

350

13 703 938

Qyzylorda Oblast

345

10 614 359

North Kazakhstan Oblast

340

13 054 332

Almaty

334

16 418 632

West Kazakhstan Oblast

317

10 532 451

Mangystau Oblast

315

10 444 260

Aqmola Oblast

301

9 876 998

Qaragandy Oblast

282

13 746 216

Turkestan Oblast

145

6 000 372

Shymkent

109

5 632 152

Summary Total

5 631

211 776 562

In the framework of the State Program, entrepreneurs paid taxes in the amount of 1 216 billion tenge (including 316 billion tenge in 2018) during 2010-2018, output of products worth more than 19 045 billion tenge was secured, 94.8 thousand jobs were created, more than 342.0 thousand jobs were maintained.

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