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Kazakh Entrepreneurship Development Fund, Sberbank affiliate to jointly support projects

Kazakhstan Materials 27 January 2021 13:45
Kazakh Entrepreneurship Development Fund, Sberbank affiliate to jointly support projects

BAKU, Azerbaijan, Jan.27

Trend:

The ‘DAMU’ Entrepreneurship Development Fund of Kazakhstan and Russian Sberbank’s local affiliate signed an additional agreement for 2021 on subsidies and guarantees within the state program ‘Business Roadmap-2025’, Trend reports referring to the bank.

Sberbank’s affiliate was the first of the second tier banks to resume accepting applications and financing in the direction of lending to small and medium-sized businesses. One of the important areas of its activities is participation in government programs to support business, since it meets the goals of the country's economic policy and provides the real sector of the economy with available credit resources.

The affiliate’s key tasks for 2020 included support domestic entrepreneurs in the small and micro-business segment jointly with the Entrepreneurship Development Fund. During the COVID-19 pandemic, the service of providing financing to replenish working capital up to 5 million tenge ($12,000), as well as an unsecured loan for business development in the amount of up to 20 million tenge ($47,000) with subsidized part of the remuneration has been vital support for thousands of Kazakh businessmen.

Since October 2020, when the unsecured loan program was launched, 874 individual entrepreneurs, 143 LLCs, and 3 peasant farms received loans. At the same time, 706 loans were issued to replenish working capital - the purchase of additional goods, closing cash gaps. 314 loans were issued for investments, of which 17 - for the purchase of vehicles, 8 - for the purchase of commercial real estate and 289 loans were issued for the purchase of equipment for production, repair, reconstruction of commercial premises and other investments.

Within the ‘Business Road Map 2025’ program, borrowers were provided with subsidies for a part of interest expenses, thus the annual rate on these loans didn’t exceed 6 percent.

Besides, the ‘DAMU’ Fund provides a guarantee, which relieves a client from obligation to provide other types of collateral within the framework of this loan product. This means that the borrower no longer needs to look for an asset that will serve as collateral to receive financing.

“This product was created to support small businesses, because it is this segment that has suffered from the consequences of the COVID-19 pandemic to a greater extent. We, in turn, are trying to help Kazakh entrepreneurs, and hence the country's economy,” said Yeldar Tenizbayev, Chairman of the Board of Sberbank Kazakhstan.

“The statistics of applications is also impressive. Having started with an unsecured loan product in October 2020, we reached the milestone, servicing the thousandth borrower in just three months, in late December. This betokens high potential of small business and the development of domestic production,” added Tenizbayev.

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