?Samruk Kazyna? Fund?s strategy of success in crisis overcome

ASTANA. January 28. KAZINFORM /Zauresh Balkenova/ Anti-recessionary plan of the Government was introduced to the Head of the State at the end of November 2008. Its main directions provide stabilization of the financial sector, the housing problems, crediting small and medium business, and development of infrastructural and socially significant projects.

Chairman of the Board of Directors of ?Samruk-Kazyna? National Welfare Fund Kairat Kelimbetov tells about implementation of the anti-crisis plan. Mr. Kelimbetov, last year the Government defined support of the banking sector as one of the first antirecessionary measures. Firstly, it is the repurchase of shares of four strategic banks. Some of the banks welcomed the initiative; the others expressed concern about the pressure on the part of the Government? Yes, stability of the financial sector of the national economy is in the limelight of the Government, the National Bank and the Agency for Financial Supervision. But there is no cause for anxiety about the Government?s pressure. The mater is that the state share in the banks? capital will amount to 25% maximum, i.e. it is not even the blocking shareholding. On Thursday, we signed documents with the stakeholders of ?Kazkommertsbank? and ?Halyk Bank?, regulating conditions of the banks? additional capitalization. We plan to sign similar documents with ?Alliance Bank? and ?BTA Bank? till mid-February. Besides, the banks will hold shareholders? general meetings and economic analysis of each financial institution. Price Waterhouse Coopers and KPMG leading auditing companies have been attracted for it. Why does the process of investing state funds in the country's top banks last so long? After the merge of two state holdings, having different functions, the new establishment ? ?Samruk-Kazyna? National Welfare Fund ? does not have statutory powers yet. The banks raised the issue: on what grounds will the Fund conduct financial analysis and participate in the capital? Besides, you can see how many directions of work the Fund has. We need a special law on the Fund in order to combine them in the legal framework. Kazakh Minister of Economy and Budget Planning Bakhyt Sultanov introduced the bill on the National Welfare Fund in the Parliament on January 15. Actually, legislative moments are very important. Last year Sustainable Development Fund ?Kazyna? was dealing with housing issues under the Government?s decisions. Now, according to the anti-recessionary programme of the Government, the Fund faces more challenging tasks in this sector? They can be described in a few words: to finish building of houses, protect interest holders and make housing apartments affordable for the population. On the eve of New Year holidays we introduced an alternative solution of all problems. The Fund offered to attract our affiliated structures ? Entrepreneurship Development Fund ?Damu? and ?Zhilstroisberbank? JSC. By that time, first five construction companies were identified in Astana with whom we started working with. How does the mechanism of interaction between the Fund and developers function? A developer creates a special purpose entity, which receives financing from ?Damu? Fund to finish housing construction. A part of finished houses accommodates interest holders, and the other part is sold through ?Zhilstroisberbank? under the conditions specified in the Stabilization Plan. But some developers are skeptical about this idea? It is necessary to understand that the time of speculative demand for real estate has gone and is unlikely to come back soon. If builders hope to benefit in the crisis, it is necessary to note that it will not happen. The state can support the sector and share losses. But there should not be any speculative activity in the market. Does the original program, in which commercial banks take part, continue? Yes, this scheme will develop in parallel. We decided to diversify approaches for getting results quickly and effectively. The most important thing is to finish construction of houses for the Kazakhstanis. There are two schemes with participation of banks and developers. The first one ? sale of housing at a fixed price ? foresees financing of object through a purpose entity created by a bank jointly with a developer. As soon as housing is ready the banks will open mortgage loan for citizens, who want to buy it. The main condition of this scheme is sale of finished housing at a price not more than KZT 96 thousand in Astana and KZT 120 thousand in Almaty for a square meter. The second scheme is adopted due to multiple appeals on the part of construction companies and banks, which consider possible to sell housing through the banks at open price. Its main difference is that construction and mortgage crediting of housing financing at commercial price is allowed. The Government afforded such opportunity to developers at their request, but providing that more expensive apartments must not become unclaimed and, before asking for the state support, the company should form 30% of the so called pool of buyers. When will the construction sector get help? We addressed the Ministry of Justice and Akimats of Astana and Almaty to fasten the registration of design companies, and solve issues of transfer of assets and rights to construction to them. Besides, the participants of the shared construction show guarantee that within the period of completing the construction at the expense of state assets, they will not be litigating with constructors, filing legal suits, as it restrains the whole process. We started negotiations with the banks and construction companies, they will finish by February 1. Not waiting for definite results with construction companies we will finance all assets to the banks until February 1, and the banks will be interested in giving these assets to constructors. How will the assets allotted to the real estate market be monitored? The order of interaction of ?Samruk-Kazyna? and participants of the scheme will be defined by the agreements between them, wherein the order of disbrursement monitoring is prescribed. The second tier banks will regularly report to the fund: to whom and on what terms the credits were given. These data will go to the law-enforcement bodies, branches of the People?s Democratic Party ?Nur Otan?, whose representatives are involved in the monitoring process. They will check the list of loaners and credits against the requirements. One more direction of the Fund work is the support of small and medium business, for which at least US one billion dollars will be spent this year. What are the priorities of the Fund in this sphere? There is only one priority? to soften the impact of the crisis on the enterprises of the domestic small and medium business. I will recall that within our institutes of development a lot of projects have already been implemented and all of them will be continued this year. The billion you noted is additional assets, which the entrepreneurs can receive in banks at maximum 14% per annum for seven years. Herewith the credit limit ?per soul? is also increased up to USD 5 million. Loans will be granted for all types of economic activity without branch and regional restrictions. Last year we forwarded inquiries to the second tier banks participating in this program, asking to provide their applications for financing small and medium business at the expense of KZT 120 bln, allotted within the Stabilization Plan. The applications were immediately submitted by 6 banks at the amount of KZT 127 bln, and shortly after concluding the agreements with the banks participating in the program, we will start financing of small and medium business within the programs of support. One of such programs ? ?DAMU ? regions? ? was successfully realized last year. This year this program has already been launched. This week Damu Fund has transferred KZT 22 bln to all regions to launch the program this year. Thank you for the interview.