State Support of Small and Medium Entrepreneurship in Kazakhstan. The Experience of Fund “Damu”
2012
Republic of Kazakhstan
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Area: 2 725 thousand km2
Population: 16,81 million people(urban: 55%, rural: 45%),
Economically active population – 8,8 million people
Capital: Astana (763 thousand citizens)
Financial center: Almaty 1 564 thousand citizens)
Administrative division:
14 regions
Astana
Almaty
Banking system: National Bank of Kazakhstan and 38 commercial banks
Overall assets of commercial banks – $90,7 billion2
GDP 2011: $182,2 billion (goods: 43.1%, services: 56.9%)
GDP per capita - $ 11,000.
Manufacturing33%
Agriculture4%
Trade13%
Construction8%
Transport & Communica-
tions11%
Other31%
Центр
Юг
Север
Восток
Запад
Кол-во субъектов
Занятое население
Выпуск продукции
Major Indicators of Kazakhstan’s SME Sector*
3*Data as of 01.06.2012
2 области
4 области
2 области
2 области
4 области
119 thousand
467 thousand people
$7 583 million
375 thousand1 141 thousand people
$16 936 million
60 thousand
243 thousand people
$2 847 million
94 thousand
356 thousand people
$3 263 million
106 thousand
374 thousand people
$9 476 million
Center2 oblasts
1 city
South4 oblasts
1 city
North2 oblasts
East2 oblasts
West4 oblasts
Number of EnterprisesEmployeesOutput
4
80 64 63 58 47
Kazakhstan is 47th, according to Doing Business
Country 2012 Rating
Singapore 1USA 4Georgia 16Malaysia 18Kazakhstan 47Kyrgyzstan 70Turkey 71China 91Russian Federation 120Ukraine 152
2008 2012201120102009
1. Financial Support
GOVERNMENT SUPPORT OF SMES
Development of solid infrastructure of financial support
Financing
2. Non-Financial Support
Development of solid infrastructure of
non-financial support
Information-analytical support,
Consulting, Training
4. Administrative regulation
5. Fiscal regulation
6. Providing access to physical infrastructure
3. Stimulation of demand on SME products and services
- active role of Damu Fund acts as an operator or agent of programs
- advisory role of Damu Fund acts as a member of interagency working groups
Imp
rove
men
t o
f le
gis
lati
ve n
etw
ork
Integration of SME with large business
Development of state procurement system
Protection of competition,Measures of tariff and
nontariff regulation
Government support of SMEs in Kazakhstan
5
Financial Agent of «Business Roadmap 2020» Program
Operator of conditional allocation of funds under Stabilization Program
Direct lending to small enterprises from own funds
“Damu” – National Development Institute
15 financial programs
10 non-financial
programs
JSC “Entrepreneurship Development Fund “Damu”:
Established in 1997 by the Decree of the Government of the Republic of Kazakhstan
Sole shareholder – State-owned JSC “National Welfare Fund “Samruk-Kazyna”
Mission: Assisting qualitative development of SME in Kazakhstan
Agent: accounting and control of state budget funds on ADB and EBRD credit lines
1997 2002 2007 20112009 …
4 financial programs
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16 regional branches one in each oblast (region) and in two major cities: Astana and Almaty
274 employeesin head office and regional branches
As of 01-06-2012:Assets – $1.22 bln. Equity – $0.32 bln.
Programs for increasing volumes and accessibility of
financing for SMEs
Stabilization program (1-3 tranches)
Programs «Damu-Regions», «Damu-
Regions 2»Targeted regional
programs (Zhanaozen, Akmola, Almaty oblats)
SME financing in small towns
Micro-lending of women entrepreneurs
Programs for diversification of entrepreneurship sector and its industrial-innovative
development
Business Roadmap 2020 (1-3 directions)
Program «Damu-Ondiris», financing of
leasing contracts in manufacturing
Development of franchising
«Senior Experts» Program
Programs for developing competence of entrepreneurs
Business Roadmap 2020 (4 direction
“Enhancing entrepreneurial capabilities" )
Entrepreneurship development centers
Business-portal, Call-center, information-analytical materials
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Programs of “Damu” on Entrepreneurship Support
SMEs are financed according to the general conditions
Special conditions for industrial innovation projects
Promotion of new business ideas and projects through
training and consulting support
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12,405 entrepreneurs were covered by financial support programs
Amount- $4 304 billion; jobs created - 24 324 Participants
15 banks
4 leasing companies
Сenter South North East WestAmount, mln $ Borrowers Jobs
1 000
1 334
417
602725
2 5003 365
1 4522 232 2 364
6 182
8 445
2 0083 631 3 233
0
200
400
600
800
1 000
1 200
1 400
*As of 01.06.2012
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Program directions:
1. Support for new business initiatives
2. Business Sector Improvement
3. Currency risk reduction
4. Strengthening Entrepreneurial
potential
Program "Business Roadmap 2020"
1. Interest rate subsidies (7%)
2. A partial guarantee for loans (up to 70%)
3. Development of production (industrial) infrastructure
1. Interest rate subsidies (7%)
2. Granting a delay in payment of taxes (except IAS) for up to 3 years without any penalty fees
3. Other activities within the plan of financial and economic development
1. Interest rate subsidies on existing loans (8%)
1. Training for start-up businesses
2. Leadership training
3. Business service support
4. «Business connections» Project
5. Training, support for youth practice and social jobs
Sustainable and balanced growth of regional entrepreneurship in non-primary (not
associated with extraction of raw materials) sectors of the economy Maintaining existing and creating new permanent jobs
Goal:
Fund "Damu" - financial agent of interest rate subsidies and loan guarantee under the 1-3rd direction of the program and the operator of the 4-th direction
Results of "Business Roadmap 2020"
Direction 214 000 people
Directions 1 and 3 $484 ths
Direction 2$479 ths
Directions 1 and 3$2,1 mln
2 направление$657,8 тыс.
The volume of planned subsidy on
the interest rate
The volume of planned tax revenues from the
program participants
Directions 1 and 3 12 818 people
Direction 25 150 people
Directions 1 and 366 107 people
Current jobsJobs created
P r o g r a m I m p a c t :
Support instrument ContractsAmount of loans,
million USD1 direction– subsidizing 1 222 998,0
1 direction – loan guarantee 50 72,6
2 direction– subsidizing 174 891,3
3 direction– subsidizing 118 488,7
Total: 1564 2 450,6
Support instrumentNumber of
participants/services
Training for start-up businesses 15 645
Business service support 19 000
Leadership Training 420
«Business connections» Project 711
58 people in Germany, 10 people in USA
Results of the directions 1-3 Results of the direction 4
1246 entrepreneurs receive support in the form of subsidized interest rates and loan guarantee
More than 43 000 new and existing entrepreneurs have been trained
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New instruments of the Program
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• Interest rate subsidies on leasing agreements (7% of the maximum rate of 14%)
• Targeted assistance for renewal of fixed assets
Interest rate subsidies on leasing agreements
• Individual guarantees for large borrowers - loan in the amount of $ 400 thousand to $ 5.0 million
• Express guarantees for existing entrepreneurs - for loans up to $ 400 thousand
• Express guarantees for new entrepreneurs - for loans up to $ 135 thousand
New system of guaranteeing
• Express guarantees on loans under simplified conditions• Grant financing• Service Support and Training
Instruments on beginning entrepreneurs support
• Information support for entrepreneurs and entrepreneurship promotion
«Business-Nasikhat» Project
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The aim is to ensure sustainable and balanced growth of regional entrepreneurship in non-primary sectors of the economy
Programs Aimed at Diversifying Enterprise and its Industrial-Innovative Development(Actively implemented since 2011)
Supported projects
The total amount of credits, mln. $.
The sum of the paid subsidies, mln. $.
1 track 357 454,5 8,8
1 track 105 672,8 14,0
3 track 38 245,6 12,2
Subtotal 500 1 372,9 35,0
Subsidized interest rates on 26.09.2011г.:
Issued guarantees
The total amount of credits, mln. $.
Guarantee amount, mln. $.
1 track 16 28,1 13,7
Guarantees for loans at 26.09.2011:
The program is implemented within the framework of the SPIIR of Kazakhstan for 2010-2014 period.
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Consulting
Information support and feedback
Support of entrepreneurswith disabilities
Creation of Business Support Centers Call-center Business-portal
Geographic Information System (GIS) Analytical Paper on SME Methodological manuals for entrepreneurs
“Damu-Komek” Program
Site : www.gis.damu.kz 3 issues of analytical book published (annually) Together with the Franchise Union 10 000 copies
were prepared
16 regional BSC created, 1 district in Zhanaozen Call-center was launched in March 2011. 2500
consultations monthly In a test mode
Site : www.damu-komek.kz 490entrepreneurs were supported
Results of the Programs on Developing Competence of Entrepreneurs
4th direction
Support for business start-ups Business Service support Leadership training «Business connections» program
43 752 attendees (in 2011 - 15 645 attendees ) More than 18,000 services were provided to over
9000 SMEs 210 attendees within 7 groups 501 participants, 58 of them took an internship in
Germany
As of 01.06.2012
Head office:111 Gogol Street, Almaty, 050004Tel.: +7 (727) 244 55 66, 244 55 77
Tel./fax: +7 (727) 278-07-76E-mail: [email protected]
Website: http://www.damu.kz
Thank you for you attention!
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