Banks refinance loans to entrepreneurs in affected sectors

In accordance with the amendments to the Resolution “On Certain Measures of State Support for Private Entrepreneurship” previously approved by the Government of Kazakhstan, a subsidiary of Baiterek NMH JSC, Damu Entrepreneurship Development Fund JSC, is working to subsidize loans.

According to the instruction of President Kassym-Jomart Tokayev, voiced during the Address dated September 1 of this year, additional support is provided to SMEs from the state, including refinancing (subsidizing) loans on preferential terms.

In accordance with the approved changes to the business support program "DKB-2025", entrepreneurs working in the industries most affected by the COVID-19 pandemic and quarantine restrictions can subsidize part of the interest rate on existing loans and leasing transactions issued by banks until August 31, 2020.

The decree established the deadline for submitting applications to second-tier banks until October 30 of the current year, on the basis of the registers and application forms submitted by the banks, the Damu Fund makes a decision on the compliance of the project with subsidies within a period not exceeding 5 working days.

Currently, banks have transferred lists of 5921 borrowers to the Damu Fund to subsidize loans, of which 3574 have already been considered for compliance with the conditions to reduce the interest rate on loans.

Among the companies and enterprises that will take advantage of this support measure are SMEs operating in the retail trade, hotel business, travel agencies, cinemas, fitness centers, vehicle maintenance and repair, preschool and primary education, and others, in total, the list includes 29 types activities.

This measure of state support is provided for the subsidy period from March 16, 2020 to March 15, 2021, according to the conditions of support, the entrepreneur will pay 6% of the nominal interest rate, and the difference between the nominal interest rate on a loan / leasing transaction and the rate paid by the entrepreneur will be paid the state through a financial agent “Damu” Fund.

After approval by the Damu Fund, the banks will inform the borrowers about the approval of the application. To complete the registration procedure, the entrepreneur must contact the lending bank to conclude a bank loan agreement or an additional agreement to existing agreements on the basis of a previously submitted application to the bank.

At the same time, for subsidized loans, the amounts of overpaid interest payments in excess of 6% will be reimbursed to the borrower by transferring money to the bank, which can be used by borrowers in the future to repay interest obligations on these loans. From the date of approval by the Damu Fund and the signing of an additional agreement with banks, the next payments on subsidized loans are made by the entrepreneur at a reduced rate.