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$164 million boost for wide range of Kazakh businesses
Four loan agreements signed during President Lemierre's visit to Almaty
To promote diversification of the Kazakh economy, EBRD President Jean Lemierre will sign loan agreements Saturday worth $164 million to finance urgently needed road improvements and make tens of thousands of loans available for small businesses, farmers, grain companies and traders.
Mr Lemierre, who is visiting Kazakhstan to take part in the meeting of the Foreign Investors’ Council, will also hold talks with President Nursultan Nazarbayev and senior government officials. He will be accompanied by senior Bank representatives and Michael Neumayr, who represents Kazakhstan on the EBRD’s Board of Directors.
The EBRD is lending $119 million to the Ministry of Transport and Communications to help improve the country’s infrastructure. The funds, which will be topped up by the government and other international financial institutions to a total of $243 million, will be used to rehabilitate the 900-km road between Kazakhstan’s main port of Aktau on the Caspian Sea and the important regional centre of Atyrau.
In addition, the EBRD is signing three agreements with the Kazakh Banks worth $45 million. The agreements foresee $20 million under the Kazakhstan Small Business Programme and $25 million under the Warehouse Receipts Programme.
Two Kazakh banks, Bank Centre Credit and Bank Turan Alem, are each to receive $10 million credit lines for on-lending to micro- and small- enterprises under the second phase of the small business programme. Loans made by the EBRD under this phase of the programme – unlike those made under the first phase – do not carry a sovereign guarantee from Kazakhstan.
The programme has already enabled more than 60,000 borrowers to develop their own businesses. And more than a third of loan officers working in Kazakh banks have been trained under the programme, with funding from the European Union, the United States and Japan. Since its launch in 1998, the Kazakhstan Small Business Programme has provided more than $400 million in loans to small businesses. Monthly disbursements stand at 4,000 loans, worth $19 million, with further strong growth expected.
A $25 million loan is being made to Kazkommertzbank under the Warehouse Receipts Programme. This programme provides farmers, grain companies and traders with access to all-year-round finance by using fixed assets and grain as collateral. Last year alone the EBRD provided more than €105 million to finance the programme in Kazakhstan.
Mr Lemierre noted that Kazakhstan’s economic growth has averaged more than 10 per cent annually over the past four years, thanks in large part to oil and gas developments. Now the country needs to ensure that future growth is well-balanced across many sectors. This will depend in part on providing entrepreneurs with ready access to finance. Mr Lemierre praised the Kazakh banking sector as a strong partner, and said recent years have proven that the strategy to put more resources and time into developing small business lending is paying off.
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