A New Business Support Program Has Been Launched

Kazyna Capital Management JSC (KCM) (a subsidiary of “Baiterek” National Managing Holding” JSC) has presented the concessional financing Program to the representatives of the business community. The uniqueness of this Program lies in the ability of entrepreneurs to attract financing in capital based on favorable terms.

The Program was developed within the implementation of the Address of the First President of the Republic of Kazakhstan to the People of Kazakhstan: “New Decade - New Economic Growth - New Opportunities of Kazakhstan”.

The background for the Program development is the current problems faced by domestic entrepreneurs, namely, the high cost of financing, high credit load, lack of collateral, lack of long-term lending, as well as exacting terms for debt servicing. Moreover, the Program has been designed to simplify business access to investments and to expand the coverage of using the direct financing instrument in capital. Thus, KCM offers an alternative affordable tool for bank lending.

- The main goal of Baiterek Holding, being a development institution, is to promote the sustainable economic development of our country. At present, financing instruments that are provided by Baiterek Holding’s subsidiaries are widespread and in demand. KCM provides concessional direct financing for new investment projects and existing enterprises in priority sectors of the economy. The priority of the new financing program is the support of non-resource-based products export, increase and modernization of the enterprises’ and infrastructure facilities’ existing capacities. As a result of the program implementation, new competitive productions will be established, including by providing support to business initiatives that do not have enough own funds or pledged property to attract traditional sources of financing; employment will be increased within business entities, - explained Anuar Omarkhojayev, the Deputy Chairman of the Board of the Holding.

In particular, the Program provides attractive financing conditions: the interest rate is 8% per annum, the amount of investments is up to 5 billion tenge with a term of up to 10 years. The KCM involvement in the funded companies is limited to 49% in the capital, which ensures the preservation of control over the company’s management by an entrepreneur.

The Program suggests financing of a wide range of industries, including manufacturing, infrastructure projects and other. The Program will be implemented in two directions: support for corporate businesses and SMEs development.

The Program operators are subsidiary organizations of KCM: Baiterek Venture Fund and BV Management. At the same time, partner banks, represented by Sberbank, ForteBank, Bank CenterCredit, VTB Bank and Alfa-Bank, have been also involved in the direction of SMEs development.

- Today, domestic entrepreneurs have a number of problems associated with limited access to lending instruments. To solve these problems, KCM has developed a new Program for a wide range of enterprises, starting from SMEs to large businesses, which will allow expanding the use of capital investment tools among the business communities of our country. Moreover, potential projects that were already under consideration by KCM have expressed their interest in participating in the Program, - said Ardak Kassymbek, the Chairman of the KCM Management Board.

In witness of the above, within the Program presentation, the subsidiary of KCM, Baiterek Venture Fund investment foundation, has entered into the investment agreement for the project of Kazmyaso LLP for a total amount of 2.5 billion tenge. Financing will be directed to the development of the existing livestock cluster in Almaty Oblast, which is one of the leaders in this segment. The Fund’s investments are aimed at improving the material and technical base, which will allow reaching a simultaneous management of up to 7 000 heads of breeding cattle and the production of 2 500 tons of meat products per year.

Reference:

“Baiterek” National Managing Holding” JSC was established in accordance with the Decree of the President of the Republic of Kazakhstan dated May 22, 2013. The key institution of the Government of the Republic of Kazakhstan that complies with the advanced standards of corporate governance and ensures the implementation of the objectives for the sustainable development of the economy of Kazakhstan through its diversification, support for innovation, export development, increase in labor productivity. The Holding includes: Development Bank of Kazakhstan JSC, Investment Fund of Kazakhstan JSC, Zhilstroisberbank of Kazakhstan (HCSBK) JSC, Kazakhstan Mortgage Company MO JSC, KazakhExport EIC JSC, Damu EDF JSC, QazTech Ventures JSC, Housing Construction Guarantee Fund JSC, Kazyna Capital Management JSC, Baiterek Development JSC, Kazakhstan Project Preparation Fund LLP.

Kazyna Capital Management JSC is a fund of private equity funds established in 2007 to promote sustainable development of the national economy, form a private equity infrastructure in Kazakhstan, attract foreign investment in priority sectors of the economy, apply advanced international practices, transfer innovative knowledge and technologies to private equity.