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New package of measures to support SMEs prepared in Kazakhstan — Aset Irgaliyev

Tuesday, 03 August 2021, 14:59:25

At the government session chaired by Prime Minister Askar Mamin, the issue of the implementation of anti-crisis measures to support business was considered.

Minister of National Economy Aset Irgaliyev, First Deputy Chair of the Agency for Regulation and Development of the Financial Market Oleg Smolyakov, Akim of the Almaty Region Amandyk Batalov presented their reports.

As the Minister of National Economy noted in his report, in the context of a pandemic and continuing restrictions on the activities of entrepreneurs, the support of small and medium-sized businesses is of particular relevance.

In this regard, incl. work on concessional lending to SMEs continues under the programs Business Road Map 2025, Economy of Simple Things, Enbek and Employment Road Map programs, as well as the National Bank's concessional lending program to replenish working capital.

The final rate on loans, as noted by the minister, is 6% per annum. The financing of working capital replenishment has been significantly expanded, the amount of loans has been increased, industry restrictions have been lifted, and affordable microcrediting has been launched for micro and small businesses.

For the first half of this year more than 31 thousand projects worth over 1 trillion tenge received concessional financing.

According to him, SME loans are being refinanced to support entrepreneurs in the affected sectors of the economy. The list of types of economic activities has been expanded. The subsidy period was extended by 3 months. For these purposes, 18.4 billion tenge was allocated from the budget.

To subsidize new business projects under the programs Business Roadmap and Economy of Simple Things, an additional 13.2 billion tenge was allocated from the budget in July. The total amount of funding for the two programs amounted to 186.3 billion tenge.

“Also in July of this year. microcrediting of graduates of the Bastau-Business project was started within the framework of the Employment Roadmap program. Allocated 22.5 billion tenge. It is planned to finance about 5,000 projects of rural start-up entrepreneurs,” Irgaliyev noted.

According to the results of the 1st half of this year, within the framework of the programs Business Roadmap 2025 and Economy of Simple Things 12,447 projects were subsidized for a total amount of loans of 441 billion tenge, guarantees were provided for 10,788 projects for a total of loans of 187 billion tenge. As part of the ACC, 134 projects were supported for loans of 5.9 billion tenge.

“The largest number of supported projects in the first half of this year. on the instrument of subsidizing loans was noted in the cities of Nur-Sultan, Almaty and Zhambyl region; on the instrument of guarantee — in Zhambyl, Turkistan regions and the city of Nur-Sultan,” Irgaliyev noted.

According to him, on the basis of a survey of more than 50 thousand business entities conducted by Atameken NCE, a new package of measures to support SMEs has been prepared.

In particular, an updated Comprehensive Plan to Restore Economic Growth for 2021 is being implemented, which provides for more than 60 support measures, including in the areas of reducing the burden on businesses, providing access to demand markets, and introducing a new regulatory policy (Smart regulation).

In addition, as the minister noted, from January 1 of this year. a new special retail tax regime was introduced at a rate of 3% on income received in the affected industries.

From April 1, 2021, to July 1, 2021, deferrals were provided for the payment of taxes from the wage bill in the affected industries.

From July 1, 2021, the right of additional VAT offset in the amount of 70% for newly created manufacturing companies was granted, the cost of protective equipment provided to employees of business entities was exempted from the IIT.

“Starting next year, measures are envisaged to exempt businesses from CIT on income used for reinvestment in new fixed assets,” Irgaliyev noted.

Also, according to the minister, in order to drastically reduce the burden on business, to form an optimal and effective regulatory system, new approaches to regulating entrepreneurial activity are being formed from a blank slate.

They provide for: improving the basic principles of interaction between the state and entrepreneurship, the conditions for establishing requirements, the institution of regulatory appeal, an experimental legal regime; register of mandatory requirements, reporting automation, improving state control, excluding the use of retroactive legal acts for business.

Currently, according to the minister, the relevant bill is under consideration in the Parliament.

“Work to support small and medium-sized businesses is carried out in close cooperation with NCE Atameken, the business ombudsman and the business community,” Irgaliyev noted.

On a regular basis, according to the minister, business issues are discussed within the framework of the Project Office on Entrepreneurship.

As the minister further noted, in a difficult epidemiological situation, one of the main ways to maintain the ability to fully operate a business is the widespread use of the Ashyq application.

“At the moment, this is the only way for business to restructure business processes in order to profit from entrepreneurial activity and protect the health of citizens,” Irgaliyev noted.

According to him, understanding and assistance of entrepreneurs on this issue is necessary here. A conscientious approach and business responsibility in using Аshyq is important.

In this regard, local executive bodies and regional chambers of entrepreneurs need to intensify work on the implementation and correct use of the Ashyq application by entrepreneurs.

“The Ministry of National Economy will continue to monitor the situation of small and medium-sized businesses,” Irgaliyev summed up.

Oleg Smolyakov, First Deputy Chair of the Agency for Regulation and Development of the Financial Market, provided information on lending in numbers.

According to him, loans to the economy in 2020 increased by 5.5% to 14.6 trillion tenge, including SMEs by 7.2% to 4.2 trillion tenge, thanks to a set of anti-crisis measures by the Government, the National Bank and the Support Agency economy, business and population.

"In the current year, against the backdrop of economic recovery, there is an increase in bank lending. For 6 months, loans to the economy increased by 7.5% to 15.7 trillion tenge. Loans to SMEs increased by 1.8% to 4.3 trillion tenge,” Smolyakov noted.

According to him, in 2020, in connection with the introduction of a state of emergency and quarantine restrictions due to a pandemic, to support the population and SMEs for the period from March 16 to Oct. 1, a measure was first implemented to provide deferred payments under bank loan and microcredit agreements.

Due to the scale of the consequences of the pandemic for the population and business, as well as the introduction of unprecedented quarantine restrictions, a deferral was automatically provided to all SMEs from the affected sectors of the economy, as well as to other borrowers whose financial situation deteriorated due to the introduction of the state of emergency and quarantine.

As a result, this support measure covered 12 sectors of the economy and 346 types of economic activity, and from March 16 to Oct. 1, 2020, 12.5 thousand SMEs took advantage of the right to defer loans for a period of 3 to 6.5 months in the amount of 209 billion tg.

On April 1, 2021, the Head of State instructed the Agency for Regulation and Development of the Financial Market and the National Bank to work out the possibility of deferring payments on loans to SMEs in the affected sectors of the economy.

There is a differentiated procedure for granting deferral depending on the categories of business entities.

To obtain a deferred payment, micro and small businesses had to apply to the lender with a statement without supporting documents about the deterioration of the financial situation. The postponement of the specified subjects is provided automatically.

Medium-sized businesses were required, when submitting an application, to attach documents confirming the deterioration of the financial condition of the organization as a result of the quarantine measures.

The grace period ranged from 30 to 90 days at the option of the SME entity.

As Smolyakov further explained, the choice of the SME entity was provided with 3 alternative payment schedules for the loan: (1) in the form of an even distribution of deferred payments until the end of the loan term, (2) increasing the loan term for the grace period, or (3) another payment schedule for the choice of the borrower.

During the grace period, claims work, notification of the need to repay overdue debts, as well as the creditor's collection of commissions and other payments were suspended in relation to the borrower.

In order to cover as many borrowers as possible, whose activities have suffered due to quarantine restrictions, the Agency carried out information and explanatory work in the media to cover the postponement mechanism. Measures have been taken to notify the borrowers of SMEs from the affected industries by banks and MFOs about the possibility of obtaining a deferred loan payments.

In the first half of this year, the recovery of the economy and business activity of business entities took place under conditions of softer quarantine restrictions compared to the measures of 2020. Within the framework of the mechanism for subsidizing interest rates up to 6% per annum, developed on behalf of the Head of State, on all existing loans to SMEs in the affected sectors of the economy, assistance was provided to 4 thousand SMEs for 21.2 billion tenge.

In addition, as Smolyakov noted, banks, together with business entities, since the beginning of 2021, have taken measures to restructure overdue debts on loans provided to 114 SMEs in the amount of 4 billion tenge. There are concessional lending programs (Program of concessional lending to replenish working capital, the Economy of Simple Things, Business Roadmap 2025).

“These measures in combination have allowed many SMEs to reduce the level of debt burden to an acceptable level, to use the freed up funds for current work, thereby returning to normal activities,” Smolyakov said.

In this regard, as of July 1, 2021, second-tier banks received applications for deferred payments on loans to 592 borrowers-SMEs, of which 547 SMEs received deferrals in the amount of 9.3 billion tenge. 129 SMEs submitted applications for a deferral to MFOs, of which the deferral was granted to 95 entities in the amount of 102.1 million tenge.

In the Almaty region, as reported by the akim Amandyk Batalov, there are about 124.8 thousand small and medium-sized businesses, of which, in the current year. more than 1 thousand business entities were opened. This area employs 262 thousand people.

Despite the work in a pandemic, the dynamics of the share of SMEs in the GRP structure is increasing. If in 2020 the growth was 1.4% and reached 34%, then in the current year. it is planned to reach 34.3%.

“The anti-crisis measures taken by the Government have provided substantial support to entrepreneurs. In total, 928 business entities received tax incentives in the amount of 2.5 billion tenge, 418 entities were provided with deferrals for loans in the amount of 3.2 billion tenge,” Batalov noted.

The accrual of rent at state-owned facilities has been suspended.

This option was used by 219 SMEs in the amount of 50.8 million tenge.

State support creates the necessary conditions for the successful development of entrepreneurship.

So, according to the Business Roadmap-2025, the Enbek program and the Employment Roadmap 2021-2022 in the current year. about 24 billion tenge is provided, which is 2.5 times more than last year.

“Due to this, we plan to provide support to over 2.5 thousand small and medium-sized businesses with the creation of 5 thousand and the preservation of more than 7 thousand jobs,” Batalov noted.

Currently, according to the akim, 1,400 projects have been financed for 12.3 billion tenge, more than 3,000 new jobs have been created.

In addition, within the framework of the Economy of Simple Things program, 267 projects are being worked out for 87.5 billion tenge.


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