Good afternoon, dear colleagues!
Today I would like to tell you about the interim results of the state program "Business Roadmap 2025", which the "Baiterek" holding is implementing through its subsidiary, the "Damu" Entrepreneurship Development Fund.
The current period for Kazakhstani business is very difficult. Due to the forced restrictive measures due to the coronavirus pandemic, businesses have to stand idle and suffer losses.
In this situation, support for small and medium-sized businesses is a priority for the Baiterek holding. For small and medium-sized businesses, we offer many available tools, both within the framework of state programs and within our own programs. Most of this support is concentrated in the government's Business Roadmap program.
The Business Roadmap has been implemented since 2010 on behalf of the First President - Elbasy Nursultan Abishevich Nazarbayev. She has already confirmed her success and secured her status as a loyal assistant to Kazakhstani entrepreneurs. Since 2013, the Damu Fund has been implementing this program as part of the Baiterek holding.
First of all, we wanted to make financing available for both urban and rural entrepreneurs. So that they can not only create their own business, but also develop an existing one. We pursued the goal of increasing the volume of production in the manufacturing industry. They wanted to create more and more new competitive industries and increase the employment of the population in small and medium-sized businesses. We are systematically reaching all these points.
So, one of the demanded tools for supporting small and medium-sized businesses is subsidizing the remuneration rate. As of August 1, 2020, the Damu Fund has subsidized 16311 projects in the amount of 2.8 trillion tenge in three areas of the program since 2010. Including in 2018 1,432 projects were supported for a total amount of loans of 173 billion tenge, and in 2019 2,402 projects for a total amount of loans of 154 billion tenge. That is, making a comparison, I would like to note that we are increasing the volume of support.
For example, LLP "Hospital complex of tomotherapy and nuclear medicine" UMIT ", thanks to government support from business, has built a diagnostic and treatment hospital complex for radiotherapy and nuclear medicine in the city of Nur-Sultan. This is a unique complex in Kazakhstan and Central Asia. Here, cancer patients are treated using a new modern method of tomotherapy (a new method of radiation therapy) with the use of TomoTherapy HD equipment. Thanks to this method, it is possible to achieve great success in the treatment of all types of cancer, even those that until now have been difficult to eliminate with the help of existing radio-emitting treatment equipment or surgery.
In order to complete the construction of this complex, the company's management attracted borrowed funds from a second-tier bank at 13.5% per annum, of which 40% per annum is subsidized by the state within the framework of the Business Roadmap 2020, and the difference is paid by an entrepreneur, the loan term is 5 years.
The industrial structure of subsidized projects is dominated by projects in the manufacturing industry (4,444 projects for a total amount of loans of 1.2 trillion tenge), transport and warehousing (3,629 projects for 413 billion tenge). In the wholesale and retail trade - 2,293 projects worth 286 billion tenge, 1,220 agricultural projects worth 144 billion tenge.
Among the regions, Pavlodar (1 304 projects with a total amount of loans of 190 billion tenge) and East Kazakhstan (1 261 projects with a total amount of loans of 179 billion tenge) regions are leading. In Aktobe region, 1212 projects worth 154 billion tenge received such support.
Another popular measure of state support for small business is a guarantee from the Damu Fund in the event of a lack of collateral, when an entrepreneur receives a loan to open or expand his business.
As of August 1, 2020, guarantees were provided for 7,518 projects for the amount of loans of 306 billion tenge, the amount of guarantees amounted to 117 billion tenge. In 2019, 1,726 projects were supported for a total amount of loans of 74 billion tenge, the amount of guarantees amounted to 27 billion tenge.
One of these enterprises - the company "Gidrostroy Shymkent Group" - the first and best manufacturer of glass mosaics in Kazakhstan. You know that glass mosaic is an extremely effective and practical option for wall decoration, decoration, floor cladding, swimming pools, fountains and so on. Nowadays, glass processing and manufacturing technologies have not only diversified the material, but also reduced its cost, which made it possible to use glass mosaic for floor and wall decoration.
To purchase equipment and replenish working capital, the enterprise applied to the Damu Fund for a preferential loan, and the second-tier bank, having considered the project, gave a positive response to financing at 14.25%, of which 7.13% is subsidized by the Damu Fund, and the Fund provided its guarantees for the missing part of the pledge.
In the sectoral context, among the financed projects, the largest share is also occupied by the manufacturing industry (2,206 projects with a total amount of loans of 103 billion tenge) and trade (1,309 projects worth 32 billion tenge in loans).
Among the regions, the leaders are Aktobe (582 projects for a total amount of loans of 20 billion tenge) and Pavlodar (535 projects for a total amount of loans of 21 billion tenge) regions.
I would like to voice other figures that demonstrate, in my opinion, the effectiveness of the program. So, entrepreneurs participating in the program for 2010-2019 produced products worth 25 trillion tenge, paid taxes in the amount of 1.6 trillion tenge. More than 100 thousand new jobs were created thanks to entrepreneurs who received state support under the CST.
If we talk about the multiplier effect, I can say that 10 tenge of loans were attracted for 1 tenge of subsidies. One in ten is a very good indicator from the point of view of financial institutions. For 1 tenge of the guarantee, almost 2.6 tenge of credit funds were attracted. In addition, 1 tenge of subsidies, as the results show, bring 135 tenge of revenue and 8 tenge of tax revenues to the budget.
From January 1, 2020, the Business Roadmap was extended for another five years - until 2025. Now it is being implemented with significant changes that will undoubtedly make it easier for businesses to access finance. Here I would like to note that this became possible thanks to the well-coordinated, efficient and highly professional work of the Ministry of National Economy of the Republic of Kazakhstan.
So, for the subsidy instrument:
industry restrictions have been removed;
the rate for entrepreneurs was unified at the level of 6%;
the amounts of loans that are subject to subsidies have been increased from 2.5 to 7 billion tenge for a period of 5 years.
on a guarantee instrument:
loans of up to 360 million tenge are guaranteed for a beginner entrepreneur. At the same time, 85% of the loan amount is guaranteed;
for existing entrepreneurs, loans are guaranteed up to 1 billion tenge. 50% of the loan amount is guaranteed;
Loans aimed at 100% replenishment of working capital up to 500 million tenge are subject to guarantee;
sectoral restrictions have also been lifted (except for trade and prohibited activities).
Interestingly, the new program "DKB-2025" includes large business entities in such industries as: the production of food, soap and detergents, paper products for sanitary and hygienic purposes, freight transportation by road vehicles, warehousing and auxiliary transport activities, tourism, rental and management of own or rented real estate.
I want to assure that the Baiterek holding and the Damu Fund will fully continue to fulfill their obligations under the state program.
We are faced with the task of increasing the number of entrepreneurs. If now the share of small and medium-sized businesses in the country's GDP is 30.8%, then by 2025 this figure should grow to 35%. We expect such colossal growth in five years, so I urge our entrepreneurs not to be afraid to seek government support to create or develop their businesses.
Thanks for your attention! I am ready to answer your questions.