The Damu Entrepreneurship Development Fund (a subsidiary of Baiterek Holding) has started implementing the National Entrepreneurship Development Project for 2021-2025, devised by the Ministry of National Economy of the Republic of Kazakhstan on behalf of President Kassym-Jomart Tokayev.
The Damu Fund has already begun accepting applications for interest rate subsidies on bank loans. Entrepreneurs can apply in the Fund’s regional branches.
The National Project has combined two previously existing programs: the Business Roadmap-2025 and the Economy of Simple Things. Under the Project, the government plans to finance micro-, small and medium-sized businesses in priority sectors of the economy or businesses that operate in small and single-industry towns.
The National Project’s first chapter says that the government will subsidize loans and microloans of entrepreneurs working in socially vulnerable regions, operating during a state of emergency, or in other cases. The money will be provided from local budgets. Entrepreneurs employed in any sector of the economy can receive financing.
The Damu Fund will cooperate with local executive bodies and will act according to the potential and opportunities a region has. Thanks to this new approach, private businesses will receive new forms of financial support.
The National Project will be aimed at supporting micro-, small and medium-sized businesses by subsidizing and guaranteeing loans. Large businesses will not be covered by the Project. Also, the Project participants will have an obligation to create new jobs.
The Project’s second chapter states that the government will support projects implemented in cities of republican significance and regional centers. The funding will be provided under the following conditions:
– only loans of up to 3 billion tenge are subject to subsidizing;
– only projects implemented in priority sectors of the economy, such as the manufacturing industry, services, etc., are subject to subsidies and guarantees. (NACE 63).
Subsidizing conditions remain unchanged for loans issued by banks and leasing companies. The Damu Fund will subsidize interest rates of up to 6% per annum (interest rate must not exceed the one established by the National Bank of the Republic of Kazakhstan) + 5% per annum.
Conditions for subsidizing projects in villages, small and single-industry towns:
– subsidizing the interest rate of up to 5%, which will be paid by an entrepreneur himself;
– small and medium-sized businesses engaged in any industry will be able to receive subsidies and guarantees;
– only loans of up to 1.5 billion tenge can be subsidized;
– only loans of up to 360 million tenge can be guaranteed;
– loans for working capital replenishment of up to 100 million tenge are subject to subsidies and guarantees.
For subsidizing refinanced loans, a primary loan must be issued less than 2 years ago. Also, entrepreneurs cannot invest their own money in a project if a loan is more than 180 million tenge.
Another amendment has been made to the National Project: leasing companies can now act as creditors if a guarantee is needed.
Guaranteeing can now be implemented through the stock market. This opportunity was provided by the Agency for Regulation and Development of the Financial Market and the KASE. This opportunity will be useful for medium-sized businesses, which need long-term loans. They can now use the KASE and AIFC (Astana International Financial Centre) to attract financing from private and institutional investors. Secured debt bonds of up to 5 billion tenge are subject to guaranteeing. The Damu Fund will guarantee up to 50% of bonds.
Amendments to the National Project should help increase the number of supported businesses and improve the Project’s efficiency.
For more information, entrepreneurs can contact the Damu Fund’s regional branches.