More than 9,000 guarantees for opening a new business or expanding existing directions were issued by the Baiterek holding subsidiary, Damu Fund, to Kazakhstani entrepreneurs. As part of this support, they were able to get loans worth 343 billion tenge, while the amount of issued guarantees amounted to 140 billion tenge.
Credit guarantee is one of the measures of state support that the Damu Fund provides to small and medium-sized businesses. The tool was launched in 2010 as part of the Business Roadmap 2020 program and is used by entrepreneurs with a lack of their own collateral. Indeed, as a rule, it is precisely the deficit of the collateral base that becomes one of the main problems in lending to SMEs.
Today, all second-tier banks in all regions of Kazakhstan are working with Fund guarantees. Entrepreneurs of the microsegment also have the opportunity to obtain a loan with a guarantee of the Fund in MFIs under the state program “Enbek” and the guarantee program “Damu-Optima”.
Since the beginning of implementation, the financial support tool has undergone a number of changes, now guaranteeing loans under programs looks like this:
- “Business Roadmap 2025” (loans up to 1 billion tenge are guaranteed, the size of the guarantee is from 50% to 85% of the loan amount, the size and duration of the guarantee depends on the loan amount and type of entrepreneur, without restrictions on financing by type of activity, except for trade) ;
- “Economics of simple things” (loans are guaranteed up to 5 billion tenge, the size of the guarantee is from 30% to 50%, the size and duration of the guarantee depends on the amount of the loan and the type of business, projects are guaranteed according to the list of goods for lending to priority projects);
- Enbek Productive Employment Development Program (loan amount from 6,500 to 8,000 MCI depending on the region, the guarantee for these loans will be 85%, the loan rate is 6%);
- “Damu Optima” guarantee program (guarantee up to 85% of the loan amount, the size and duration of the guarantee depends on the loan amount, type of business, loan amount up to 180 million tenge, payment of a guarantee commission for 2.5% of the principal loan balance) .
To date, the Fund has significantly simplified the mechanism for issuing guarantees. This became a necessary measure, as the number of supported projects was growing rapidly. Well, in 2018, a portfolio guarantee method appeared. This, by the way, simplified the process even more, because now the bank has the right to independently decide on the provision of a guarantee without additional consideration of the project by the Fund.
If you delve into the benefits, it can be noted that the Fund is not currently considering each application individually; and the terms of consideration of loans issued with the guarantee of the Fund are reduced; and, of course, the package of documents decreased. The results were not long in coming; at present, the circle of entrepreneurs covered by the financial instrument of state support has expanded significantly.
Last year, according to official figures, the percentage of guarantees issued by this method amounted to 10%, and this year, following the results of 6 months, the share of guarantees issued by the portfolio method increased to 37%.
In 2019, the Fund, together with the First Credit Bureau (PCB), launched a joint project for automated credit rating of entrepreneurs, which allows optimizing the process of obtaining SME loans and improving the quality of risk management.
- The scoring model for the project guarantee tool for less than 20 million tenge for private entrepreneurs is another tool for automating risk assessment and validation, which has reduced the time required to draw up a risk management report on a project by three times. This qualitatively improves the service of the Fund as an operator and optimizes lending processes, – said Gaukhar Buribaeva, Chairman of the Board of Damu Entrepreneurship Development Fund JSC.
Dinara Zhusupova, an aspiring entrepreneur from Kostanay, received more than one guarantee for the development of her business through the Damu Fund.
- The first time I contacted the Fund in 2018, when I decided to purchase a new ultrasound machine for my office. Under the “Enbek” program, I took out a loan from the bank for 15 million tenge. The Fund provided me with its guarantee. In 2019, I applied for the second time. I had difficulties with renting a room, and I decided to purchase my own. The bank approved a loan of 9 million tenge, the Damu Fund also provided a guarantee. I opened my Medical ultrasound center "ZD med." And the other day I received approval for a third loan, for the purchase of portable ultrasound equipment. The guarantee tool is very convenient, especially when there is no collateral. In my example, I recommend everyone to use this opportunity through the Damu Fund, - told Dinara Zhusupova.
Unfortunately, there are times when entrepreneurs cannot realize their business idea. In these cases, the Damu Fund, acting as a guarantor, fulfills its obligations to the bank in full.
Recall that during the period of the emergency regime on the guarantee instrument 173 projects were supported for a loan amount of 10.2 billion tenge, the amount of guarantees amounted to 4.3 billion tenge.
Entrepreneurs wishing to receive guarantees from the Damu Fund can send their applications online through the egov.kz and online.damu.kz portals, as well as get online advice on the websites www.damu.kz, www.online.damu.kz or by calling the single Call-center 1408 (the call is free). You can also contact managers in the regions directly, contact information is available on the website and on the Fund’s official accounts on social networks.