Government?s 2008 review: development of entrepreneurship

ASTANA. January 13. KAZINFORM – What were the main priorities in the activity of the Government in 2008? What are the main indices of social and economic development of the country in this period? Kazinform offers the readers the informational reference material on the development of entrepreneurship in the country.

In the year 2008 the work of the Government was dedicated to the planned shortening of administrative barriers for development of small and medium business. 13 Decrees of the Government were adopted along with the range of intra-department acts, aimed at lowering the administrative barriers and improvement of the business climate in our country. The performed work resulted in upgrading of the international ratings of Kazakhstan. In particular, by the results of the World Bank researches in the category ?Doing Business?, Kazakhstan, in comparison with the previous year, has upgraded by 10 positions and now it occupies 70th place in the list of 181 countries. Within realization of anti-crisis measures the monitoring of arrangements is aimed at provision of financial support of subjects of small and medium business (hereinafter SMB). Starting from the 4th quarter of 2007 until now the total sum of assets, forwarded to provide the financial support to small and medium business has been KZT 214,8 bln., out of them KZT 126,8 bln. were allotted from the state budget, KZT 10 bln at the expense of own assets of JSC ?Damu? Fund? and KZT 28 bln are allotted by the local executive bodies, and KZT 50 bln are additionally allotted by the second tier banks (hereinafter STB). SMB financial support is performed through conditioned allocation of assets in the STB for further crediting of MMB subjects and by co-financing with local executive bodies through JSC ?Damu? Fund? according to the following schemes: 1. The 1st tranche of stabilization program of financing the projects of MMB of ?Damu? Fund of Support of Entrepreneurship (FSE) ? STB. For realization of this program KZT 48.8bln were allotted from the state budget. Annual rate for the end loaners in this program must not be higher than the market rate. The term of development is 3 months, exemption period is 2 years. Cumulative amount of assets, developed by the BST, considering re-distribution, has made KZT 51,3 bln. At this amount 2238 projects were financed, herewith the average amount of credit is KZT 23 bln, average weighted rate is 17,7%, and effective rate is 20,2%. 2. The second tranche of stabilization program of financing the projects of SMB, ?Damu? FSE ? BST. For realization of this program the state together with the STB has allotted KZT 100 bln. As of December 1, 2008 from these assets 1830 projects were financed at the amount of KZT 59,6 bln or 59,6% from the total amount. 3. Program of co-financing the SMB in the regions with participation of ?Damu? Fund and local executive bodies. KZT 56 bln ? this program suggests implementation of co-financing the MMB in the regions with participation of ?Damu? Fund and local executive bodies each paying KZT 28 bln. Considering proposals of the National Economic Chamber ?Union Atameken?, as well as of entrepreneurs, and the state bodies, the rate of remuneration within this program for the end loaners was decreased from 14% to 12,5% As of December 1, 2008 the banks have factually credited 258 projects at the amount of KZT 5 bln or 8,9% from KZT 56 bln. As a result of performed work the alterations and additions were introduced in the Plan of immediate actions for provision of stability of social and economic development regarding: - shortening the term of STB?s developing the assets of ?Damu? Fund? and the term of developing the assets of STB upon the program of 50/50 from 6 months until 4 months, until December 25, 2008; - canceling the restriction on re-financing of previously given credits over the projects of SMB at primary allocation of assets over all programs of the state financing; - canceling of restriction for financing by the STB of turnover assets of loaners at primary allocation of assets over all programs; - increase of the limit of financing per one loaner from USD 3 mln to USD 5 mln over the production projects of SMB; - lowering the rate of remuneration over the program 28/28 from 14% to 12,5%; - restrictions of effective interest rate over the credits for the end loaners in all the programs at the level not higher than 12,5%. Besides, ?KazAgro? JSC joined the implementation of the new financial programs, which will provide real support to the subjects of SMB, including the rural entrepreneurship.