SMEs to recieve loans for promoting economic growth

19 Aug '08

2 min read

Small and medium scale business enterprises will receive 100 billion tenge as loan from the Government that aims to give a boost to the economic growth of two of its biggest cities.

Kazyana, a state-owned bank will furnish 50 billion Tenge as loan to businesses in Astana, the capital of Kazakhstan, and Almaty. Besides, during a Cabinet Meeting held in Astana, Industry Minister also confirmed that the remaining 50 billion Tenge would come from other commercial banks.

Economy of the country has grown at an average of 10 percent per year since 2000 and has expanded by 5.4 percent in the first half of this year. This is mainly because banks across the country stalled further lending due to global tightening of credit.

The SMEs will get financial aid at an interest rate at as less as 12.5 percent a year while the Central Bank of Kazakhstan has cut its benchmark interest rate from 11 to 10.5 percent with effect from July 1 to help ease a credit squeeze.

In the first half of this year, Almaty based businesses got 302.9 billion tenge from commercial banks which marked a slump of 44.3 percent over the corresponding period last year. Moreover, tax payments from the companies in the region also dropped by 13.6 percent in the first seven months to touch 248.9 billion tenge.

However, with the recent decision to fund SMEs in both the cities, Kazakhstan is likely to do a lot better in terms of business output and profit margins from revenues.

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