In Kazakhstan, an active increase in the volume of leasing of domestic agricultural machinery is noted. According to KazAgroFinance JSC, in 2022, the growth was 22% compared to the previous year. Compared to 2018, the volume has almost tripled, says Niyaz Koshkimbaev, Managing Director of Baiterek National Managing Holding JSC.
"Kursiv" spoke with a representative of the holding and found out the details about the demand for agricultural machinery in the Kazakh market.
– More than two years ago, KazAgroFinance became a subsidiary of Agrarian Credit Corporation JSC, the sole shareholder of which is Baiterek. Tell us about the interaction of companies and progress during this period.
– I would like to remind you that Baiterek Holding continues to work on optimizing the structure, the number of subsidiaries is being reduced: for example, in 2019 there were 14 of them, in 2021 there are already eight. In March of the year before last, the subsidiaries of KazAgro entered the group of companies of the Baiterek holding. By the end of the same year, the merger of two subsidiaries of the holding - the Agrarian Credit Corporation and the Fund for Financial Support of Agriculture - was completed.
From December 13, 2021, all obligations on loans to FFSA clients were transferred to the ACC, the functions of lending to micro-businesses, an insurance operator in the agro-industrial complex, and the functions of an attorney (agent) for rural mortgages were transferred as part of the project “With a Diploma to the Village!”.
A year later, in November 2022, the international rating agency Fitch Ratings upgraded the long-term issuer default ratings (IDRs) of KazAgroFinance JSC in foreign and national currencies from 'BB+' to 'BBB-'. I would like to note that the rating outlook has been revised from “Positive” to “Stable”. I think this indicates a fairly high level of indicators of cooperation between the holding and its subsidiaries, a correctly chosen development strategy and high performance.
– Please tell us in more detail about KazAgroFinance itself and about the main activities of this company.
- It was created in 1999, on December 28. It turns out that for more than 23 years she has been leasing agricultural machinery. There is a developed network including 15 branches. The company's portfolio includes more than 11 thousand clients. And the main task is to help improve the technical equipment of the agro-industrial complex of Kazakhstan, providing high-quality and competitive leasing services.
One of the main activities is the leasing of agricultural machinery, special equipment for agricultural work, vehicles for transporting products. The company tries to increase the amount of financing every year. In 2022, we observed an increase in the volume of leasing of domestic equipment by 22% compared to the previous year, and compared to 2018, the volume almost tripled.
- KazAgroFinance actively finances agricultural machinery. Can you talk about recent achievements and funding results?
– In 2022, more than 6.8 thousand units of agricultural machinery were financed for 172.8 billion tenge. Of these, 4,752 units (worth 100.7 billion tenge) were used for spring field work, and 2,054 units worth 72.1 billion tenge were used for harvesting.
It is important to note that the share of financed Kazakh-made equipment amounted to 62%, which is a significant increase compared to 2018, when it reached only 21%. Such growth occurred due to the implementation of preferential leasing programs for domestic equipment, such as the leasing program at the expense of Zhasyl-Damu JSC.
– What are the main goals and clients of the company's preferential programs?
– In 2022, KazAgroFinance JSC implemented a program of preferential leasing of Kazakh agricultural machinery at the expense of the National Fund at 6% per annum in the amount of 15.5 billion tenge. This made it possible to finance a significant amount of equipment on more favorable terms.
In addition, the company offers a program of preferential leasing of agricultural machinery manufactured in the Republic of Kazakhstan at the expense of Zhasyl-Damu JSC. For its implementation, 40 billion tenge was allocated for the purchase of about 1 thousand units of self-propelled agricultural machinery from Kazakhstan. Financing terms include interest rate of 6%, lease term up to 10 years and advance payment of 0%.
In 2023, the company is already offering several other important preferential financing programs to support agriculture in the republic.
The “Own Feeds” program is aimed at meeting the needs of animal husbandry in the forage base and increasing the production of livestock products. 20 billion tenge was allocated for it from budget investments. Financing terms - rate 6% per annum, leasing period - up to 10 years, advance payment - from 15% of the value of the leased asset. It is important to note that under this program, counter obligations are established for the lessee, that is, for example, an increase in the payroll fund and tax revenues by 10% within two years after receiving the finance.