The heads of “Baiterek” NMH JSC and its subsidiaries discussed a new analytical project – Kazakhstan Beige Book (BeigeBook.kz). The meeting participants noted that this independent economic review will help increase the effectiveness of the government support measures.
After the official launch of the Kazakhstan Beige Book at the beginning of the year, Baiterek Holding, the main institution providing financial support to entrepreneurs through government programs, was the first to come out with positive responses.
At the round table, experts shared their views on the implementation of government programs, the report that the Beige Book contained, and the current condition of the business credit market. The participants believe that expert analytics and an independent opinion will improve the quality of government support measures.
According to Aidar Arifkhanov, Chairman of the Management Board of Baiterek Holding, today the Holding issues 49.5% of long-term credits to non-primary sectors of the economy.
“According to the last year’s results, the Holding (Damu Entrepreneurship Development Fund in particular) issued 43% of the total amount of loans to small and medium-sized businesses”, – said Aidar Arifkhanov.
In turn, the Development Bank of Kazakhstan continues to support national-scale projects. As its head Abay Sarkulov noted, in the absence of long-term financing in tenge from second-tier banks, DBK is the driving force of long-term crediting to non-resource sectors of the economy, providing half of the money.
“Today, DBK's portfolio includes 61 investment projects and 16 pre-export operations with a total value of 7.1 trillion tenge. In 2020, 18 investment projects were financed for 342.9 billion tenge; 8 investment projects and 4 export operations were approved for financing for 195.4 billion tenge and pre-export financing was provided to 15 projects for 143.3 billion tenge”, – stated Abay Sarkulov.
The First Credit Bureau always highlights the main trends in the credit market. According to Ruslan Omarov, the Director General of the Bureau, due to the high demand for credits and the development of online business microcredits issued by second-tier banks and microfinance organizations, the total sum of loans issued to businesses reached 14.5 trillion.
“The structure of business loans changed in 2020. The share of second-tier banks, traditionally issuing the better part of loans, amounted to 87%. At the same time, Kazakhstani banks issued loans for 9.4 trillion tenge for entrepreneurial purposes. 9% or about 1 trillion tenge was issued by government-owned companies to support businesses, and about 2% or 189 billion tenge was issued by the microfinance organizations”, – said Ruslan Omarov.
The Beige Book analysts point out that entrepreneurs are still optimistic despite the difficulties they faced in 2020. The respondents noted the stability of enterprises, the high level of capacity utilization, the elimination of some excessive bureaucracy, and the development of digitalization and automation.
The Baiterek Holding’s subsidiaries have also succeeded in developing digitalization, with the Damu Fund being one of the leaders in its segment.
“At the end of 2020, 96.7% of all applications for subsidizing the interest rate under the “Business Road Map 2025” program were submitted online to the Damu Fund. For comparison, in 2019, only 678 approved applications, or 28% of the total number, were submitted online. The share of online applications for the provision of guarantees reached 90.5% in 2020. Over the past year, the number of applications to the Damu Fund increased 1.3 times, from 24.3 thousand at the end of 2019 to 32.5 thousand applications at the end of 2020”, – said Gaukhar Buribayeva, Chairman of the Board of the Damu Fund.
Following the discussion, Darmen Sadvakasov, the Managing Partner of Dasco Consulting Group, assumed that the need for specialized analytics will grow taking into account the need to diversify the economy, develop small and medium-sized businesses, and overcome the impact of the pandemic.
“To increase the efficiency of government support measures, projects such as the Kazakhstan Beige Book will help make right management decisions to develop the economy and improve the business environment”, – said Darmen Sadvakasov.
The Kazakhstan Beige Book is a summary of commentary on current economic conditions, existing and emerging trends, analysis of the mutual influence of various factors, identification of risk zones, assessment of the investment attractiveness of economic activities. The information was gathered via surveys of entrepreneurs, public representatives and experts, and interviews with businessmen. The USA and China Beige Books are widely known.