Government supports SMEs, exporters, by subsidizing banks' interest rates
Under this program, on May 14 in Astana Kazakhstan's Ministry of Economic Development and Trade, "Damu" Entrepreneurship Development Fund, the Financier's Association, second-tier banks and Akimats of all regions of Kazakhstan signed the "Agreement on cooperation in subsidizing interest rates on enterprises' loans" and the Agreement on state's loan guarantee", which aim at interest rate subsidies and state guarantees on loans for the country's small and medium-sized businesses.
Minister of Economic Development and Trade Zhanar Aitzhanova noted that these documents "are intended to ensure equal treatment for all participants in the program, as well as transparency in making decision on providing state support".
From now on an enterprise that meets the program's requirements may receive new forms of state support. In 2010 at fee rate of 12% an enterprise will pay 5% of it while the state compensates the remaining 7%. Exporters will get a solid support with state subsidizing interest rates, as they would get 8% of its fee rate subsidized by the state.
Considering that the average market rate today amounts to 14%, the President of the Financier's Association of Kazakhstan Serik Akhanov assured that "for the first time in the post-soviet space an enterprise gets loans at such low percentage". In his turn Prime Minister of the Republic of Kazakhstan Karym Massimov was pleased to note that there are few countries in the world indeed that have such a low fee rate".
Regarding the money for implementing the program "2020 Business Road Map" this year, according to Aitzhanova, the national budget has already allocated 30 billion tenge. Of these funds 12 billion tenge are allocated for backing new business initiatives, 16 billion tenge are aimed to improve the business sector, and 2 billion tenge are to encourage export-oriented industries.
The program's key executors are the Ministry of Economic Development and Trade, Regional Coordinating Councils, local executive bodies, the "Damu" Entrepreneurship Development Fund and the second-tier banks.
In conclusion Prime-Minister Massimov stressed: "I think economic development now largely depends on our well-coordinated work. We have money in the bank, we have the borrowers, and the interest rate is now 7%. That is to say, all favorable conditions are created and now all is in business' hands".
The program "2020 Business Road Map" is approved by Government Resolution of April 13, 2010 on the initiative of the President of Kazakhstan Nursultan Nazarbayev. This program is aimed at accelerating the industrialization of the country, ensuring sustained and balanced growth of regional entrepreneurship in the non-oil sectors of the economy, as well as maintaining and creating new permanent jobs. The agro-industry, industrial production, construction materials production, light industry and technical services in mining, metallurgy, activities in health service and education are priority sectors for program's potential participants.