Kazakh banking sector to have new development turn in two years

Astana, Kazakhstan, May 11
By Daniyar Mukhtarov - Trend:

Small and medium business in Kazakhstan, industrial policy, as well as the country's banking sector will have a new stage in their development in the next two years, the statement of the Organizing Committee of the 47th annual meeting of the Board of Governors of the Asian Development Bank reported.

"And besides, not only the state but also the international partner- the Asian Development Bank will help them. In total, about $ 7 billion will be allocated to the development of entrepreneurship in the coming years," the statement said.

As reported earlier, a new framework agreement on co-financing has been signed between the president of the Asian Development Bank (ADB), Takehiko Nakao and Kazakhstan's Prime Minister Karim Massimov in the presence of Kazakh President Nursultan Nazarbayev.

"The country's economy, our entrepreneurs today are in need of the long-term credit resources. They are not available in our banks that just came out of the crisis. There is also not external financing or pre-crisis money. Therefore, we need to think about other sources of investment to support the development of small and medium businesses," the head of state said earlier.

Then, the president stressed that these funds should be directed primarily at lending to SMEs and assured that he would ensure using every tenge. And now, under a new agreement, the ADB will help to keep track of each tenge spent.

"This framework agreement has been built on a fruitful 20-year partnership. At present, the ADB is a leading development institution in Kazakhstan, which since 1994 has provided a total of $ 3.2 billion for 25 loans to the public sector, $ 31 million for 68 technical assistance projects, and $ 455 million for six projects to the private sector, Nakao said.

Co-financing will be as follows: $ 5.5 billion (1 trillion tenge) for the project will provided by Kazakhstan. In turn, the ADB will provide the country with a new loan in the amount of 1.6 billion which also will be used to support industrial policy, SMEs and the banking sector.

"The mechanism works as follows: ADB in collaboration with the Kazakh government develops various projects. These projects have a certain budget, which consists of a portion of the money allocated by ADB and the money allocated for co-financing from the budget of Kazakhstan," Director General of ADB Department of Central and Western Asia Klaus Gerhaeusser said.

Furthermore, the ADB specialists will help Kazakhstan correctly, and most importantly effectively dispose of these funds and direct them on the right track. In other words, a coordinating council under the Kazakh government chaired by Massimov will be created, where the members of the cabinet , together with ADB experts will discuss how to quickly and efficiently develop joint actions and the implementation of all planned projects. The strategy itself is designated until 2016, however, as the ADB experts noted, the government plans to implement it in much less time. Therefore, the work in this direction will start literally from day to day .

For the first time, Kazakhstan not only hosted the annual meeting of the Board of Governors of the ADB, but also became chairman. The council meeting was held on May 2 -5 in Astana. The theme of the meeting was "The Silk Road: Connecting Asia with a changing world."

Established in 1966, the Manila- based ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. The bank is owned by 67 members, including 48 from the region. In 2013, ADB's portfolio amounted to $ 21 billion, including co-financing in the amount of $6.6 billion.

Translated by S.I.
Edited by C.N.

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