Azernews.Az

By Aynur Jafarova

The European Bank for Reconstruction and Development has allocated a loan worth 10 billion tenges for five years to Kazakhstan’s Bank CenterCredit (BCC) for on-lending to micro, small and medium enterprises.

At least 60 percent of the loan proceeds will be distributed outside of the main cities of Almaty and Astana, EBRD said on December 23.

BCC, which is the sixth largest bank in Kazakhstan with a network of 20 branches, prioritises its work with MSME clients, and the EBRD loan will help it to improve access to financing to clients in the regions.

The loan will be guaranteed by Damu Entrepreneurship Development Fund JSC and will be accompanied by a technical assistance programme with the aim of facilitating further strengthening of BCC’s internal capacities in the MSME area.

“In the current difficult market conditions, the essential task of BCC is to support its clients. The development of the small and medium-sized business has always been a major priority of BCC. The new EBRD loan along with technical support will contribute to strengthening the Bank’s position in the sector of private micro, small and medium enterprises in Kazakhstan”, BCC CEO Vladislav Lee said.

This loan to BCC will be the first sub-operation under a new $200 million Kazakhstan MSME Framework set up by the EBRD to expand access to medium term local currency funding for MSMEs in the country.

The funding will be channelled via local commercial banks, microfinance organisations and leasing companies with a special focus on projects in rural areas, where access to long-term MSME financing is particularly constrained. The framework will be accompanied by technical assistance specifically tailored to the individual needs of each partner financial institution.

“The Kazakhstan MSME Framework will build on the extensive work the Bank has done over a number of years in the local MSME sector. Our work will focus on the promotion of finance in rural areas, on local currency lending, and on technical cooperation programmes to help rebuild institutional capacity in MSME lending. Bank CenterCredit is a longstanding partner of the EBRD with a historical focus and expertise in the MSME area. We are pleased to launch our first project under the new framework with them,” Mike Taylor, EBRD Director for Financial Institutions for Kazakhstan, the Caucasus and Mongolia, said.

“Development of the MSME segment and continued support to the local financial sector are the top priorities for the EBRD in Kazakhstan. We not only provide financing but are engaged in an active dialogue with the Government of Kazakhstan, DAMU, the National Bank and other stakeholders,” added Janet Heckman, EBRD Director for Kazakhstan.

Since the beginning of its operations in Kazakhstan, the EBRD has invested close to $6.75 billion in the country’s economy, with more than half of the total supporting projects in the private sector.