Kazakh National Economy Ministry talks about measures to support SMEs within state programs amid COVID-19

Business Materials 9 September 2020 18:52 (UTC +04:00)
Kazakh National Economy Ministry talks about measures to support SMEs within state programs amid COVID-19

BAKU, Azerbaijan, Sept. 9

By Nargiz Sadikhova – Trend:

The work was carried out to expand concessional lending as part of the support measures during the ongoing pandemic in Kazakhstan, the Kazakh Ministry of National Economy told Trend on Sept. 9.

The final cost of the borrowed funds for entrepreneurs upon the "Business Road Map 2025" and "Economy of Simple Things" programs is currently six percent.

"The loan amount has been increased up to seven billion tenges ($16.7 million) in the Business Road Map 2025 program,” the ministry said. “The subsidy period is five years. The loan amount is not limited in the "Economy of Simple Things" program.”

“The guarantee instrument was also improved,” the ministry said. "The guarantees may reach 85 percent of the loan amount in the "Business Road Map 2025" program. A guarantee is given for 50 percent of the loan amount in the "Economy of Simple Things" program."

The sectoral restrictions have been removed in the Business Road Map 2025 program, which allows small and medium-sized businesses, regardless of their type of activity, to become a participant in the program and receive concessional financing.

In turn, the list of goods and services has been greatly expanded in the "Economy of Simple Things" program while the total volume of possible lending within this program has been increased by up to 1 trillion tenges ($2.3 billion).

"Moreover, the National Bank launched a program of concessional lending to small and medium-sized businesses, without the sectoral restrictions, as well as for individual entrepreneurs,” the bank said. “The loans are issued for a year at eight percent to replenish the working capital. Some 600 billion tenges was allocated for this program ($1.4 billion)."

“In general, many restrictions have been removed to increase lending, mechanisms have been simplified and the amounts have been increased,” the ministry said.

"A new direction will be launched within the "Business Road Map 2025" program upon the president’s instructions,” the ministry said. “This is the micro crediting of micro and small businesses. For this category of business, the loans through subsidies will be available at a rate of six percent.”

“The loans will be issued to replenish the working capital up to five million tenges ($11,900), for production needs - up to 20 million tenges ($47,700),” the ministry said. “There will be no restrictions on the types of activity.”

"The state will also guarantee up to 85 percent of the loan amount,” the ministry said. “The loans will be issued by commercial banks and microfinance organizations. The procedures for subsidizing and guaranteeing the loans will be simplified as much as possible. The main goal of the program is to ensure maximum coverage of micro and small businesses by concessional lending."


Follow the author on Twitter: @nargiz_sadikh