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Wednesday, September 22nd, 2021

Labor Ministry: 62 billion tenge is allocated for financing the microlending program

by March 13, 2018 Market

During today’s Government meeting chaired by Bakytzhan Sagintayev, Minister of Labor and Social Protection of Population Madina Abylkassymova reported on the progress of implementation of the fourth initiative of the Head of State aimed at expanding microlending in rural areas and cities.

Madina Abylkassymova noted that microlending is being developed today within the framework of the Productive Employment and Mass Entrepreneurship Development Program for 2017-2021 and is the most effective mechanism for the development of mass entrepreneurship.

In 2018, 42 billion tenge is allocated for the microlending program within the approved budget, including 31 billion tenge for rural areas and 11 billion tenge for cities and monotowns.

On the instruction of the Head of State, the financing will be increased by 20 billion tenge, and this year will amount to 62 billion tenge,” M. Abylkassymova said.

In order to ensure the qualitative impact of microlending, as well as the timely planning of delivering the funds to the final borrower, the Minister of Labor and Social Protection of Population proposed to use about 14 billion tenge from the additionally allocated 20 billion tenge for microlending in rural areas and small towns. Of this amount, 10 billion tenge is proposed to be spent on the implementation of anchor cooperation projects around large processing agricultural enterprises. The remaining 6 billion tenge is proposed to be used for lending in cities and single-industry towns.

M. Abylkassymova noted that to defend business projects and receive microcredits, unemployed and self-employed citizens must first be trained under the Bastau-Business project. Taking into account additional funds, it is proposed to provide not less than 1.2 billion tenge through general transfers for training in entrepreneurship.

For the speedy delivery of loan funds to the final borrower, it is necessary to ensure the signing of trilateral credit agreements on previously allocated funds before the end of March and immediately start issuing microcredits. With regards to additionally allocated funds, it is necessary to ensure the signing of tripartite credit agreements until the end of April this year, M. Abylkassymova summed up.

For the purposes of greater coverage of the population with microlending, the Minister also proposed to revise the limits for issuing loans differentially for cities and the countryside and to polish the mechanism for delivering microloans to the end consumers.

Preferential microcredits are granted for up to 5 years, and for livestock projects and the creation of agricultural cooperatives up to 7 years, the annual effective interest rate is not more than 6% per annum. In the event of insufficiency of collateral, the participants of the Program are entitled to receive a guarantee as security for the performance of the loan obligations. In general, to implement the proposed mechanisms, changes will be made to the Program, as well as to the rules on microlending in cities and rural areas, M. Abylkassymova concluded.

Recall, President Nursultan Nazarbayev, speaking the joint session of the Chambers of the Parliament, announced his five social initiatives aimed at social modernization. The initiatives concern housing, education, business and gas infrastructure.

Source: Government of the Republic of Kazakhstan