Astana, Kazakhstan, Nov. 3
By Daniar Mukhtarov - Trend:
The Agriculture Ministry of Kazakhstan is carrying out financial recovery of the entities of agro-industrial sector, according to a message from the ministry.
The ministry said the financial recovery is performed under the program for the development of Kazakhstan's agroindustrial complex, titled Agribusiness-2020.
"The financial recovery's main indicator is the prolongation of timeframe for returning and reducing the interest rates on the agroindustrial sector entities' loans and leasing liabilities to the total debt amount of at least 300 billion KZT (180.87 KZT = $1)," the message said.
In total 17 financial institutions are involved in the recovery program.
Most of the agricultural producers, applying for recovery, are from the grain-producing regions of Kazakhstan.
The main debt, or 86.4 percent, is owed by the crop producing sector, livestock sector (2.8 percent), agricultural processing (5 percent), and others (5.6 percent).
In order to render financial support to agricultural producers, who, due to some reasons can't pay loans granted by the second tier banks and other financial institutions, the national management holding of Kazakhstan, the KazAgro sets the interest rate for bad loans placement in KZT at an amount not exceeding 3 percent per annum.
This is carried out given the fact that 7 percent of the allocated funds will be reimbursed by the state in the form of subsidies.
KazAgro will further refinance the agribusiness entities' liabilities by awarding a new loan agreement with a fee rate of no more than 7 percent per annum.
As part of the financial recovery, the loan repayment period will be extended to 9 years, and the penalties and fines will be written off.
The message said that via the business entities' and agricultural associations' participation in the financial recovery program, it is supposed to reduce the total bank fees by 2 times, slice the agricultural producers' loan burden, and save over 25,000 permanent jobs in rural areas.
The size of the written-off fines and penalties will stand at about 2.8 billion KZT.
The Financiers Association of Kazakhstan and the financial institutions' representatives pointed to additional need for recovering the agroindustrial sector entities for a debt exceeding 80 billion KZT.
Currently, Kazakhstan is making necessary changes in the "Agribusiness 2020" program and the Financial Recovery Rules.
The work is also underway to increase the agroindustrial entities' loan and leasing obligations, which are being recovered, the message said.
Edited by CN