Baiterek Holding to continue reorganizing its subsidiaries working in the agricultural cluster

On behalf of President Kassym-Zhomart Tokayev, Baiterek Holding continues to reorganize its subsidiaries operating in the agricultural cluster. This process will not in any way complicate access to financing for farmers. Murat Daribayev, the Holding’s Managing Director, speaks about the reorganization process in the interview below.

– Murat Amankeldievich, in March, 2021, KazAgro Holding was merged into Baiterek Holding. As a result, Baiterek Holding included three financial institutions: Fund for Financial Support of Agriculture JSC, Agrarian Credit Corporation JSC, and KazAgroFinance JSC. These are important development institutions working in agriculture. What does Baiterek Holding plan to do with these companies?

– The President has set the task for Baiterek Holding to halve the number of subsidiaries.

As for companies operating in the agricultural cluster: Fund for Financial Support of Agriculture (hereinafter – the Fund), which issues microcredits to small businesses, is planned to be merged with Agrarian Credit Corporation (hereinafter – the ACC), which is financing medium and large agricultural projects, sowing, and harvesting works.

The ACC will become the only crediting organization for the agricultural industry. Farmers will not have to think of where to apply for a preferential loan: the ACC or the Fund.

KazAgroFinance – the largest agricultural machinery and equipment leasing company in Kazakhstan – will become the ACC’s subsidiary too.

The Fund will quit guaranteeing loans issued by banks to agribusinesses. This function will be taken over by Damu Entrepreneurship Development Fund (Baiterek Holding’s subsidiary), which is already guaranteeing bank loans for businesses.

– How will it affect the access to financing for agricultural manufacturers?

– You may have noticed that all three subsidiaries of the former KazAgro Holding play a key role in providing the agro-industrial complex businesses with affordable crediting, leasing of agricultural machinery and equipment. The reorganization processes should certainly not complicate access to financing in any way.

Our goal is to ensure continuity, so the reorganization process will go unnoticed by the companies’ clients.

First, the reorganization will not lead to revising the current financing conditions. Perhaps, after the Fund joins the ACC, credit programs will be consolidated to make it easier for farmers to choose a loan. The key conditions, such as the remuneration rate, loan term, grace period and other conditions, will remain unchanged.

Secondly, upon merging, the Fund’s personnel, who provide financial services, will be transferred to the ACC. We understand the farmers’ desire to continue working with these experienced employees, who understand their specifics well. In addition, this will help avoid delays in the consideration of loan applications received by the Fund.

Thirdly, we have chosen measures and set deadlines for reorganizing companies. Baiterek Holding keeps the processes of reorganization under constant control and carries out overall coordination.

– When do you plan to complete the reorganization?

– Not all issues of reorganization are within the competence of Baiterek Holding. We need to amend certain orders of the ministries of agriculture and a number of laws too. If all the documentation is updated in time, the reorganization of companies, including the transfer of employees and the loan portfolio, are planned to be completed by the end of this year.

– Thanks for the interview!