Economy • 05 March, 2020

Developing investment subsidies in agricultural sector

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In order to increase the availability of financing for agribusiness entities, the implementation of the investment subsidy program was continued in 2019. This tool of state support for agribusiness entities is now the most popular, primeminister.kz reports.

Under this program, 66.5 billion tenge was allocated at the beginning of 2019, and then, due to insufficient funds to meet the needs of agribusiness, an additional 41.1 billion tenge was allocated at the end of the year with the support of the Prime Minister of the Republic of Kazakhstan.

As a result, the amount of investment subsidies reached 107.6 billion tenge or an increase of 2.2 times compared to 2018.

At the same time, the number of applications for subsidies amounted to 22.7 thousand, whereas since the beginning of the implementation of the investment subsidization program, that is, over the five-year period, 22.9 thousand applications have been sub-sponsored, which ensured the growth of investments in fixed assets of agriculture in the amount of 501 6 billion tenge (an increase of 27%), while in 2018 the volume of investments amounted to only 395.6 billion tenge.

The next mechanism to increase the availability of financing is subsidizing interest rates on loans and leasing. The program provides for a reimbursement of 10% of the interest rate on loans for the purchase of agricultural machinery, agricultural animals, fixed assets and construction, as well as 5% for loan agreements for working capital replenishment.

Also, in this area, agricultural projects are subsidized under the Economy of Simple Things program, where the final rate is 5% for loans for fixed assets and 6% for working capital, taking into account subsidies.

In 2019, about 21 billion tenge was allocated for these purposes. This allowed us to cover subsidies of more than 9 thousand loan agreements and attract 372 billion tenge of borrowed capital to the industry.

 

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