New approaches of Program on granting state support measures to ensure continuous development of business at all stages of its activity – Minister of National Economy

Today the Government is implementing both systemic measures to improve the business environment and reduce the administrative burden, and direct measures of state stimulation of the business sector. Alibek Kuantyrov, Head of the Ministry of National Economy, told about it at the Government session chaired by Alikhan Smailov, Prime Minister of the Republic of Kazakhstan. 

He noted that the development of entrepreneurship is an important factor in the sustainable development of the national economy. According to official statistics, over the past year there has been an increase in the share of SMEs in GDP, for the period from 2021 to 2023, the participation of Kazakhstani SMEs in the economy increased from 33.5% to 36.5% by 3 pp. Total employment in 2023 increased by 10.4% to 4.3 million people. To date, one of the demanded measures of state support for business remain the tools of the programs Business Roadmap and Economy of Simple Things, the operator of which is the Damu Foundation.

"Thus, at the end of 2023, measures of preferential financing through subsidizing loans covered more than 12 thousand business projects for the amount of loans of about 1 trillion tenge, guarantee provided for 8 thousand projects for the amount of 340 billion tenge. Within the framework of non-financial support, about 10 thousand entrepreneurs were trained, more than 166 thousand provided consultations on various issues of entrepreneurship. This year's budget provides about 300 billion tenge to support 40 thousand ongoing and 20 thousand new SME projects," the Minister said. 

In terms of regions, the largest part of projects for subsidizing implemented in the cities of Almaty, Astana, Shymkent, Almaty and Aktobe regions. The least number of projects in Ulytau, Zhetisu and Abay regions. By sector, projects in manufacturing, transportation and warehousing, and education prevail.

By guarantee instrument, the most projects are in Astana, Almaty and Pavlodar regions. By sector, manufacturing, transportation and warehousing projects also prevail.

"In pursuance of the President's Address to the people, the Ministry has developed a Program for the provision of state support measures, which provides for the unification of the programs of DCB and FTE. The main emphasis in the Program is aimed at the development of competitive, import-substituting and export-oriented industries and the creation of new jobs," Kuantyrov said.

The program consists of 6 directions:

I direction "Micro entrepreneurship";

II direction "Small and medium entrepreneurship";

III direction "Small, medium and large entrepreneurship in manufacturing industry and services";

IV direction "Entrepreneurship in mono- and small towns and rural settlements";

V direction "Social Entrepreneurship";

VI direction "Stock Exchange".

Within these areas, budget allocation for subsidizing new projects will be made primarily for enterprises in the manufacturing sector.

The program envisages a gradual transition from subsidies to guarantee instruments and other non-financial support measures. New approaches to subsidizing SME projects envisage a differentiated method of subsidizing with a gradual transition to market conditions.

"Thus, for the first 3 years, taking into account subsidization, the final borrower will be financed at the rate - 8%, the 4th year - 9%, the 5th year - 10%. This approach will allow to reduce the burden on the budget and realize a gradual transition of business to market-based financing mechanisms. In order to increase the effectiveness of state support measures, counter obligations have been strengthened. Also, basic entry criteria have been established for selecting competitive small and medium-sized enterprises. At the same time, the gradual transition from the instrument of subsidizing will be accompanied by the expansion of loan guarantees," the head of the Ministry of National Economy explained. 

World experience shows that the guarantee tool is the most effective measure and solves the main problem of business - lack of collateral to banks. Thus, on guaranteeing the amount of lending increased to 3.5 billion tenge, for which will be provided guarantees up to 50%, and the list of OKED revised towards expansion.

At the same time, the new approach to guaranteeing provides for transition to market conditions, where the entrepreneur will pay a commission on guarantees over 500 million tenge. For social entrepreneurs, the guarantee amount has been increased to 1 billion tenge. 

As the development of alternative financing instruments, it is proposed to introduce a syndicated lending instrument, expand the terms of the bonded loan, provide grants for social entrepreneurs and participants of the "One Village - One Product" project, and implement regional programs through subsidizing rural development companies.

New approaches of the developed Program will ensure continuous development of business at all stages of its activity.

Small and medium business is one of the main focuses of the Government and the National Chamber of Entrepreneurs "Atameken". This was stated by the chairman of the Presidium of the National Chamber Raimbek Batalov at the Government session. 

He noted that the NCE, as an operator of non-financial support, provides services on the following instruments:

  • provision of service support for entrepreneurial activities;
  • information and consulting services for entrepreneurs and population with entrepreneurial initiative;
  • development of entrepreneurial potential "Men - kasipker".

All tools are aimed at providing information and consulting, service and educational services for entrepreneurs and start-up businessmen: information and consulting on existing measures of state support and financing, obtaining permits, consulting on accounting and tax reporting, services on business plan development and tender procedures, legal support,

sectoral and specialized training, mentoring, implementation of the project "One Village - One Product" and other similar topics.

The services are provided in the Entrepreneur Service Centers in all 20 regions of the country at the regional and district levels. By the end of 2023, more than 170 thousand services and consultations for more than 72 thousand clients were provided.

"Since 2023, the implementation of a new tool "Men - kәsіnker" has started, which is realized in two directions. "Kәsіnke bagyt" includes competence training and sectoral (profile) training to increase entrepreneurial potential. Training was provided to 976 SMEs in 27 sectoral business areas. The second is the Women's Entrepreneurship Development Centers, which include services for women entrepreneurs and women with entrepreneurial initiative. According to the results of 2023, more than 13 thousand services for 8 thousand women were provided within the framework of the Women's Entrepreneurship Development Centers, including the implementation of the project "One Village - One Product" 20 regional exhibitions were held, which were attended by 519 producers of goods from local raw materials, from whose products 60 goods were selected," the speaker said. 

Within the framework of non-financial support measures, the following indicators were achieved in 2023: 

  • 2001 SMEs opened 
  • 244 permits were obtained for SMEs
  • 1,314 projects were supported for a total financing amount of 15.2 billion tenge
  • 2147 jobs were created within the framework of the projects
  • More than 3,678 tax and statistical reports were prepared

In 2023, by concluding a joint memorandum on mutual cooperation between the NCE RK "Atameken" and the state corporation "Government for Citizens", pilot implementation of the project of Multifunctional Center for servicing entrepreneurs in the cities of Astana, Shymkent and Almaty. The total number of public services provided in the Multifunctional Center amounted to more than 9 thousand units.

In 2024, jointly with the Ministry of National Economy of the Republic of Kazakhstan and local executive bodies, the following is being developed:

  • taking into account the successful experience of implementation of ICDP, launch in other regions of Kazakhstan, which will provide a basis for transition of service delivery from offline to online;
  • expanding the availability of services without gender division for the areas of business review, training on fundraising and the project "One Village - One Product";
  • inclusion of non-financial support measures for social entrepreneurs among the beneficiaries of services; 
  • organization of mass training on e-commerce for SMEs together with the Ministry of Trade and Integration of the Republic of Kazakhstan;
  • together with NUH "Baiterek" JSC, second-tier banks, "Association of Financiers", akimats to finalize financial tools to support micro and small businesses;
  • development of a separate program for micro and small businesses, taking into account regional specifics, integrated with the existing MNE Program on SME support;
  • for medium and large businesses with the Government, Investstab, MFA, local executive bodies to introduce an interactive investment map with the Register of investment projects, which implies changes in the state planning system, as well as the approval of a unified procedure for monitoring the implementation of investment projects.

Certain issues related to the support of small and medium-sized businesses in the manufacturing industry, agribusiness, transportation and logistics are being discussed and worked out jointly with the Government.

#Economy #Government session #SME

Stay updated about the events of the Prime Minister and the Government of Kazakhstan - subscribe to the official Telegram channel