ADB to issue $200M for Kazakh SMEs
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The Asian Development Bank (ADB) has approved a $200 million equivalent loan to provide much-needed financing in local currency to micro, small- and medium-sized enterprises (MSMEs) in Kazakhstan.
“The funds will help finance working capital and productive investments of MSMEs and boost lending to women entrepreneurs, especially in regions outside Astana and Almaty,” said Giovanni Capannelli, ADB Country Director for Kazakhstan.
The loan will be channeled through the Damu Entrepreneurship Development Fund, a government-owned agency mandated to provide loans and guarantees to MSMEs through qualified microfinance organizations and local banks. The ADB loan will be provided in tenge to reduce currency-related risks of financial institutions and their borrowers.
In addition to the loan, the ADB will provide a technical assistance grant of $500,000, financed by the Government of Luxembourg through the Financial Sector Development Partnership Special Fund to help improve the credit risk management of selected financial institutions and expand financing opportunities for MSMEs.
In 2015, there were 1.1 million MSMEs registered in Kazakhstan
including individual entrepreneurs, small enterprises, and
medium-sized enterprises. While MSMEs contribute to more than 25
percent of the country’s gross domestic product, only 19 percent of
them have ever received a bank loan.
Insufficient documentation, poor credit history, and issues with
property titles for collateral tend to be hampering MSME access to
financing.
ADB support will allow MSMEs to access financing which is needed
to maintain operations, invest in productive technologies, and grow
business, thereby contributing to job protection, economic
stability, and diversification under the current challenging
conditions.
Since joining ADB in 1994, Kazakhstan has received around $4.9
billion in sovereign and non-sovereign loans, and guarantees for
agriculture and irrigation, education, finance, transport, water
supply and sanitation sectors.
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