The proposed framework (KSBP III) is the third phase of EBRD's small business programme in Kazakhstan, which started in 1998. KSBP III aims to address the financing gap for micro and small enterprises (MSEs) in remote/rural regions and in the agriculture sector.
To this end, KSBP III will assist banks with dedicated Technical Assistance (TA) to build up the necessary institutional capacity for mass scale lending to rural and agricultural MSEs. EBRD will extend credit lines to selected Kazakh partner banks, for these banks to on-lend the funds to MSEs in rural/agricultural areas.
The objective is to further expand the outreach of the Kazakh banks into the regions and to provide access to finance to those MSEs, which were so far neglected due to their remote location, limited size or lack of credit history or collateral. Non-bank Microfinance Institutions (MFIs), meeting the Bank’s eligibility criteria will also be considered for TA and loan financing under the framework.
The transition impact is estimated to be high.
The programme has had already a positive impact on the economy and the Kazakh banking sector via its training and institution building programme. So far more than 200 MSE finance departments have been established, which have disbursed more than 143,000 loans to MSEs. The current extension of the programme into the rural and agricultural sector will provide finance to an important target group and help to ease regional and economic inequalities.
KSBP III will co-operate with the following existing partner banks (Kazkommertsbank, Halyk Savings Bank of Kazakhstan, Bank Turan Alem, ATFBank, Bank CenterCredit), with new partner banks, and potentially with non-bank MFIs.
USD 100 million framework of senior loans in USD and local currency equivalent financed by EBRD.
In addition, up to USD 60 million will also be potentially provided via co-financing and syndications to the commercial market.
USD 160 million.
The partner banks and non bank MFIs will follow the EBRD’s Environmental Procedures for Small and Micro Loans in relation to all sub-loans financed through the credit line. In implementing these procedures, the clients will assess potential environmental issues associated with sub-projects, which are required to comply, at a minimum, with local/national health, safety, environmental and public consultation requirements.
USAID has committed USD 300,000 and additional technical corporation funds are currently being sought. It is expected that the existing partner banks will co-finance the technical assistance.
Maria Teresa Zappia
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