On behalf of the Head of State, in the framework of the Fourth Social Initiative, the Ministry of Labor and Social Protection of Population implements microcredit for self-employed and unemployed citizens to ensure the growth of incomes of the population through the development of entrepreneurship. So, in 2018, funding for the program was increased by 20 billion tenge, including for microcredit in cities — 6 billion tenge, in villages — 14 billion tenge.
“Taking into account the additionally allocated funds, the total amount for microcredit amounted to 62 billion tenge. Of these, 45 billion tenge (73%) were allocated for microcredit in rural areas and 17 billion tenge (27%) in urban areas. With the funds allocated, the microcredit coverage plan was doubled compared with 2017 and amounted to 14 thousand people,” said Abylkassymova.
According to the terms of the Program, microcredits are provided for the purpose of opening a microbusiness, expanding an existing business and developing anchor cooperation. Microcredits are granted for up to five years, and for projects in the field of animal husbandry and the creation of agricultural cooperatives — up to 7 years. The nominal interest rate on loans is no more than 6% per annum. Also for start-up entrepreneurs, guarantees are provided not exceeding 85% of the loan amount.
In 2018, in order to effectively implement the Fourth Social Initiative, the Program was amended to include:
- differentiation of microcredit limits in rural areas and cities,
- increasing the size of microcredits for the development of anchor cooperation — from 5 to 8 thousand MCI in rural areas;
- development of anchor cooperation around the processing of agricultural enterprises and the simplification of procedures for the issuance of microcredit;
- addition of the number of participants in the Program to existing entrepreneurs;
- reduction of requirements for creating at least one new permanent workplace for existing entrepreneurs, participants of anchor cooperation and agricultural cooperatives;
- inclusion of rules for guaranteeing entrepreneurs — participants of anchor cooperation, the period of state registration of which with tax authorities is more than three years.
Abylkassymova notes that according to the 2018 results, 59.5 billion tenge was mastered under the microlending program, of which 45.4 billion tenge in the countryside, 14.1 billion tenge in urban areas. In total, 14,053 microloans were issued in 2018, of which 12,760, or 116% of the annual plan, in rural areas, 1,293 in urban areas. The average size of microloans in rural areas was 3.5 million tenge, and 11 million tenge in cities.
At the same time, out of the number of microloans issued, 9,772 microloans accounted for the support of start-up projects, 1,024 microloans contributed to the development of anchor business, and 3,257 microloans expanded their own business.
In terms of economic sectors, microcredits were granted for the development of animal husbandry — 76%, crop production — 2.7%, poultry farming — 2.2%, transport and warehousing — 6%, manufacturing industry — 2% and provision of other types of services — 5.6%.
As Abylkassymova noted, as part of the microcredit program, 13,367 self-employed people and 1,686 unemployed people had the opportunity to do business, as well as to formalize their activities. Thus, in the framework of this initiative, an important social effect was obtained in the form of job creation. Total microcredit recipients additionally created 12,613 jobs.
It should be noted that one of the conditions for obtaining microcredits under the Program is training in the basics of entrepreneurship under the Bastau-Business project. This project is being implemented jointly with the Atameken National Chamber of Entrepreneurs. In 2018, training covered 28.3 thousand people or 100% of the annual plan, of which 19.4 thousand participants defended their business projects, of which 7.7 thousand received microcredits. Following the results of training in 2018, 95% of the number of participants who launched the business began to transfer taxes to the budget.
According to Abylkassymova, at the expense of the allocated funds, the task has been set to cover 14,000 people with microcredit in 2019, of which 12,000 people in rural areas, 2,000 people in urban areas. The 2019 amount of funding for the microcredit program is 62 billion tenge.
According to the ministry, in order to fulfill microcredit indicators in 2019, microcredit program operators together with regional akimats need to speed up the signing of tripartite loan agreements and ensure targeted use of allocated funds and bringing to final borrowers.
In the direction of "Development of microcredit" special attention is paid to work in rural areas. The First Vice Minister of Agriculture Arman Yevniev reported that the provision of microcredits for the implementation of business projects in rural areas and small towns is being implemented within the framework of the Enbek State Program. For these purposes, in 2018, a budget loan of 44.7 billion tenge was allocated, including 13.9 billion tenge of additional funds allocated under the Five Social Initiatives of the President. In addition, a mechanism for guaranteeing microloans issued through microfinance organizations and credit partnerships is provided for. The operator is KazAgroGarant JSC. So, in 2018, 553 guarantees were issued in the amount of 1.6 billion tenge. In 2019, it is planned to issue 12 thousand microloans, including 2,400 — for start-up business.
In turn, First Vice Minister of National Economy Ruslan Dalenov reported that in 2018, 13.9 billion tenge was allocated for microcrediting in cities, including 6.1 billion tenge additionally allocated from the republican budget within the framework of the Five Social Initiatives. In the cities and single-industry towns, 1 311 projects worth 14.4 billion tenge were financed.
In case of insufficiency of collateral, entrepreneurs are granted guarantees of microcredits up to 85%. In 2018, 484 contracts of guarantees in the amount of 2.8 billion tenge were concluded. Almost every third loan provided guarantees. In 2019, 9.3 billion tenge was allocated from the republican budget, and also seven billion tenge was planned to be allocated from the local budget.
In addition, earlier entrepreneurs could not participate in the Program. Now, in connection with the removal of restrictions, the number of microloans issued will increase significantly. Work is also underway to create microfinance organizations in all regions of Kazakhstan.