Loan portfolio to support business in Kazakhstan amounts to US$2.7 billion, Kazakh Ministry of National Economy reports
Development of the entrepreneurship in Kazakhstan is one of the priority issues. Tax incentives are provided, credit is expanded, and measures are taken to further facilitate the business environment to support the small and medium-sized businesses. Kazakh Minister of National Economy Ruslan Dalenov talked about the improvement of the business climate at a meeting of the Government chaired by Kazakh Prime Minister Askar Mamin.
“Adopted reforms to improve the business climate allowed Kazakhstan to rise to 25th place in DoingBusiness ranking. A number of measures to improve the business climate has been already taken to support and develop the entrepreneurship. The measures involve tax incentives, inspections reduction and credit expansion. We adopted a comprehensive plan for restoring economic growth by the end of the year as well as additional measures to support business. A special state committee is operating,” said the Kazakh Ministrer of National Economy.
Concessional financing tools have been developed and they will be an important asset to the SME sector.
“A new area will be launched on behalf of Kazakh President Kassym-Jomart Tokayev as part of the Business Roadmap-2025 program. This is microcredit to micro and small businesses. For this category of business, loans through subsidies will be available at an interest rate of 6 percent. Loans to replenish working capital of up to five million tenge (US$12,468) and for production needs up to 20 million tenge (US$49,872) will be provided,” said Ruslan Dalenov.
National Bank of Kazakhstan launched a program of preferential lending to SMEs, including individual entrepreneurs, without industry restrictions. Loans are issued for one year at 8 percent for replenishment of the working capital. 600 billion tenge (nearly US$1.5 billion) were allocated for this program.
Many restrictions were lifted for all programs, mechanisms were simplified, and amounts were grown to increase lending in the country. To date, loan portfolio for all programs amounted to 1.1 trillion tenge (US$2.7 billion). Around 16,000 projects were funded.
“The state will also provide guarantee up to 85 percent of the loan amount. The loans will be issued by commercial banks and microfinance organizations. Procedures of subsidizing and guaranteeing credits will be maximally simplified. The main goal of the program is to provide maximum coverage with concessional lending to micro and small businesses. The adopted Comprehensive plan for restoring economic growth and additional measures to support business will be the new impetus in the entrepreneurship development,” commented the minister.
The Comprehensive plan was adopted on May 20. More measures were developed in addition to it by offers of the business community. They were taken on June 18. Work is underway to create a new version of the Strategic Development Plan until 2025.
“Kazakh Parliament adopted a new package of legislative initiatives to improve the business climate on June 18. This is already 8th reform package. The new law is aimed at the improving the security of real estate transactions and accelerating the registration of enterprises,” added Mr. Dalenov.
Support also comes from reducing the tax burden. On behalf of President Tokayev, from January 1, micro and small business entities applying special tax regimes were exempted from income taxes for three years. Tax as well as social payments from the wage fund and property tax rates were canceled, the value added tax rate was reduced from 12 to 8 percent for socially significant food products in various sectors of the economy until October 1.
According to the Ministry of National Economy, the SME produced goods worth 31.2 trillion tenge (US$77.8 billion) last year. The sector's share in GDP grew to 30.8 percent. The goal is to bring this indicator to 35 percent by 2025, and to 50 percent by 2050.