Tools to support entrepreneurs in foreign

trade activity: The experience of

Kazakhstan

2017

“Damu” Entrepreneurship Development Fund” JSC

• Established in 1997 according to the Decree of the Government of the Republic of Kazakhstan

• Mission: Fostering quality SME development in Kazakhstan through comprehensive support,

including a wide range of financial instruments and programs for the development of

competences

• The sole shareholder - JSC “National Managing Holding” Baiterek”

18 CES (in every regional

center, Astana, Almaty,

Semey, Turkestan

14 Mobile CES in districts

Regional network:

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Tools to support entrepreneurs in foreign trade

activity offered by the Fund "Damu"

Subsidies

Guarantes

Financing

Funding entrepreneurs through Banks under

program of support for SMEs in the

manufacturing sector

The partial credit guarantees on loans to

entrepreneurs under the Unified program of

business development and support "Business

Road Map 2020"

Subsidizing interest rates of entrepreneurs

under the Unified program of business

development and support "Business Road

Map 2020"

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Subsidized interest rates on loans / leasing transactions

• Main terms:

• Period of subsidizing – 3 years, with prolongation up to 6 years

• The maximum amount of subsidized credit / leasing – 4,5 bln. tenge ($14,5 mln/) Including up to 30% for replenishment of working capital (1,35 bln. tenge ($ 4,3 mln.)) and up to 70% for investment purposes (2,95 bln. tenge ($ 9,5 mln.))

• The purpose of the project - investments, replenishment of working capital, refinancing

• Special term: the amount of foreign exchange earnings from the total volume of earnings for the previous 6 months is not less than 10%

• The main terms for projects in foreign currency:

• The maximum rate on the loan / leasing - 12% per annum

• Subsidized rate - 5% per annum

• The main terms for projects in tenge:

• The maximum rate on the loan / leasing - 19% per annum

• Subsidized rate on loan - 6% per annum

• Subsidized rate on leasing– 7% per annum

Unified program «BRM 2020»

Direction "Reducing currency risk"

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Participants of the 3rd direction - Entrepreneurs, sells and (or) plan to implement their own

projects in the priority sectors of the economy and the priority sectors of the manufacturing

industry as defined in the State Program for Innovative and Industrial Development of the

Republic of Kazakhstan for 2015 – 2019

The partial guarantee on loans

• Guaranteeing projects in priority sectors - up to 50% on loans up to 360.0 million tenge

• Guaranteeing projects in the sectors of manufacturing industry - up to 20% on loans up to 1,850 bn

• Purpose of project - investment and the modernization and expansion of production

• Guaranteeing loans to 60.0 million tenge, 100% of which is directed to the RWC – allowed

• Terms of guaranteeing – up to 5 years

• For loans, 100% of which is directed to the RWC - term guarantee of 3 years

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Unified program «BRM 2020»

Direction "Industry Support"

Participants of the 2nd direction - Entrepreneurs, sells and (or) plan to implement their own projects

in the priority sectors of the economy and the priority sectors of the manufacturing industry as

defined in the State Program for Innovative and Industrial Development of the Republic of

Kazakhstan for 2015 – 2019

The program to support SMEs manufacturing

industry at the expense of the National Fund of the

Republic of Kazakhstan

Interest rate Amount of credit Term

6% Up to 1 850 mln. tenge Up to 120 months

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• Allocated in April 2014 1 tranche

100 bln. tenge

• Allocated in December 2014 2 tranche

50 bln. tenge

• Allocated in March 2015 3 tranche

50 bln. tenge

Application of funds

(773 projects, 149,1* bln. tenge)

Application of funds

(422 projects, 105,0* bln. tenge)

Application of funds

(484 projects, 91,8* bln. tenge)

• *Banks issued by repayable funds on previously issued loans

Dynamic of subsidizing results

Support for exporters

Subsidizing of interest rates

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Since the start of the Unified program of business development and support "Business Road

Map 2020“in the third direction "Reduction of currency risk" supported 312 projects amounting

to exporters 397.8 billion tenge, paid 23.3 billion tenge subsidies.

Amount of credit, mln. tg The number of signed contracts, units

245,501

322,019

368,944 386,062 397,458 397,817

177 221

274 291 310 312

0

100

200

300

400

500

0

150,000

300,000

450,000

01.01.13 01.01.14 01.01.15 01.01.16 01.01.17 01.04.17

Amount of credit, mln. tenge Number of signed contracts, units

Number of subsidy contracts by region,

unit

8

The largest number of exporters’ projects subsidized in South - Kazakhstan, Kostanay, North -

Kazakhstan, East - Kazakhstan and Akmola regions.

According to the amount of credits, the leading regions are South - Kazakhstan, Kostanay, East -

Kazakhstan, Akmola and Almaty regions.

Amount of credits of subsidy contracts by

region, mln. tenge

Support for exporters

Subsidizing of interest rates

1

2

3

4

4

5

6

7

11

13

20

27

41

50

59

59

0 10 20 30 40 50 60 70

Atyrau r.

Zhambyl r.

Kyzylorda r.

Aktobe r.

Mangystau r.

Astana

Almaty

West-Kaz r.

Almaty r.

Pavlodar r.

Karaganda r.

Akmola r.

East-Kaz r.

North-Kaz r.

Kostanay r.

South-Kaz r.

1,583

2,103

5,672

5,968

10,279

11,439

13,466

16,762

16,902

17,563

24,533

36,963

45,527

53,396

57,508

78,153

0 20,000 40,000 60,000 80,000 100,000

Atyrau r.

Kyzylorda r.

West-Kaz r.

Zhambyl r.

Astana

Almaty

Mangystau r.

Karaganda r.

Aktobe r.

Pavlodar r.

North-Kaz r.

Almaty r.

Akmola r.

East-Kaz r.

Kostanay r.

South-Kaz r.

Number of subsidy contracts by

industries, unit

9

In the sectorial structure of the projects:

• 42% - food producing projects

• 21% - heavy industry projects

Support for exporters

Subsidizing of interest rates

Amount of credits of subsidy contracts by

industries, mln. tenge

1

2

2

3

5

6

13

13

20

49

67

131

0 50 100 150

Furniture

Paper prod.

Other

Other types of industry

Building materials

Agriculture

Light industry

Transporting

Chemical industry

Trade

Heavy industry

Food industry

75

363

1,616

2,448

2,792

5,302

16,016

26,223

26,588

79,919

114,787

121,689

0 50,000 100,000 150,000

Furniture

Other

Building materials

Other types of industry

Agriculture

Paper prod.

Transporting

Light industry

Chemical industry

Trade

Food industry

Heavy industry

Information about exporters - customers of the

Fund "Damu" by country

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Exporters - customers of the Fund "Damu" sell their own products:

mainly in Russia, Uzbekistan, Tajikistan, Kyrgyzstan and China.

Number of exporting enterprises by

country The distribution of exporting enterprises

by country

5

5

5

6

6

7

14

15

23

23

29

41

0 20 40 60

Ukraine

Mongolia

Turkey

Georgia

Belarussia

Azerbaijan

Europe

China

Tajikistan

Kyrgyzstan

Uzbekistan

Russia

1

1

2

3

5

6

10

12

12

108

0 50 100 150

9 countries

8 countries

7 countries

10 countries

4 countries

6 countries

3 countries

5 countries

2 countries

1 country

The structure of export products of “Damu”

Fund’s customers

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Country Name of export products

Russia, Kyrgyzstan,

Uzbekistan, Tajikistan

grain products, wheat, barley,

flax seeds, meal, cotton hulls

mineral and drinking water,

cooking and technical salt,

fruit and vegetable and flower production,

insulating materials, insulating varnishes

liquid ammonia, ammonium nitrate,

starter batteries, stationary batteries and diesel,

plastic pipes and plastic products

capacitor equipment

China

packaging products made of polypropylene and polyethylene,

chocolate products

flour products,

flax, peas, seeds, felt,

semi-finished product "wet-blue" from the skins of cattle and small cattle, leather, protein waste of raw

hides, semi-finished "wet blue" from the cattle skins

Turkey

polypropylene and polypropylene bags,

semi-finished product "wet-blue" from the skins of cattle and small cattle, leather, protein waste of raw

hides, semi-finished "wet blue" from the cattle skins

EU

Frozen fish fillets (pike, carp, catfish and others.)

fruits and vegetables,

Packaging products of polypropylene and polyethylene

Chocolate products

Felt, washed wool, textiles, liquid ammonia

Georgia capacitor equipment

plant protection products and fertilizers, wheat

Headquarters

050004, Almaty, Gogol str., 111

Phone: 8 (727) 244-55-66, 244-55-77

Call-center: 1408

Fax: 8 (727) 278 07 76

E-mail: info@fund.kz

web: http://www.damu.kz

Thank you for your attention!

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