Finance • 20 April, 2018

President’s Five Social Initiatives: Scope of microcredit financing will double

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Today at the briefing in the press center of the Government, Deputy Director of Entrepreneurship Development Department of the Ministry of National Economy, Chingiz Akhmetov, told about the expansion of microcredit under the President’s Five Social Initiatives, reports

Within the framework of implementation of the President's Five Social Initiatives, a total of 20 billion tenge will be allocated for microcredit development.

"As a result, in total the microcredit financing will cover more than 14 thousand people, which is double the level of 2017. The significance of this initiative is that it will allow thousands of people to open their own business and solve the employment issue," Ch. Akhmetov emphasized.

As noted by the MNE RK representative, in order to achieve the declared indicators in cities and single-industry towns, a package of changes to the Program has been prepared jointly with the MLSPP, in particular, the maximum amount of microcredit will be reviewed and restrictions on obtaining microcredit for replenishment of current assets in the trade sector will be lifted. In large cities, the loan amount will be 17-19 million tenge, and in rural areas — 8 million tenge.

Regarding the work carried out within the framework of the State Program for the Development of Productive Employment and Mass Entrepreneurship for 2017-2021, the speaker noted that to support entrepreneurial initiatives in the countryside and in cities on preferential terms (no more than 6%), microcredits up to 8000 MCIs (up to 19 million tenge) were granted without sectoral restrictions.

In case of insufficiency of collateral, the possibility of guaranteeing microcredits from the state side is provided (for start-up entrepreneurs, the amount of guarantees is up to 85% of the cost of microcredit, for operating microcredits — up to 50%).

Microcredits are issued by second-tier banks and microfinance institutions. For speeding up the bringing of budgetary funds to the population, the terms for the execution of means by second-tier banks have been reduced to 6 months. Previously, this period was 12 months. In 2017, the average loan maturity for loans was 51 months (4 years and 3 months).

"We believe that the measures taken will help intensify the work of banks in this direction and ensure timely delivery of budgetary credits to the population," Ch. Akhmetov summed up.

Recall, the Program for the Development of Productive Employment and Mass Entrepreneurship for 2017-2021 was developed on behalf of the Head of State and is aimed at promoting productive employment of the population and involving citizens in entrepreneurship. Administration of support tools in cities and monotowns is assigned to the Ministry of National Economy, in rural areas and small towns — to the Ministry of Agriculture. General coordination of the Program is assigned to the Ministry of Labor and Social Protection of Population.

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