DAMU Fund, a Kazakh entrepreneurship development fund, has granted a total of KZT22bn (US$181m) to six of the countrys commercial banks as part of the Governments programme to support small and medium-sized enterprises (SMEs) in Kazakhstan.
The funds are to be distributed to the following six banks ATF Bank (ATFB KZ)(ATFBp KZ)(ATFBp8 KZ), Bank CenterCredit (CCBN KZ), Eurasian Bank, Kaspi Bank (CSBN KZ)(CSBNp KZ), Nurbank (NRBN KZ)(NRBNp6 KZ) and Tsesnabank (TSBN KZ)(TSBNp KZ) for redistribution to SMEs.
According to the statement, to take advantage of the loans via the banks involved, SMEs will not need to pay more than 12.5% annual interest, or 250 basis points higher than the official National Bank refinancing rate, which currently stands at 10.0%. The effective annual interest rate will be a maximum of 14%.
The banks are to provide loans for up to seven years to SMEs for the purchase and modernisation of fixed assets, increase of working capital and refinancing of current debts. Also, under the DAMU programme requirements, the total indebtedness per single borrower including other loans provided by DAMU, is not to exceed KZT382m (US$3.1m). However, for SMEs with manufacturing projects, the total indebtedness amount per single borrower is permitted to be as high as KZT637m (US$5.2m).
No significant share impact is expected for Kazakhstans commercial banks because these funds were part of the Governments previously-announced SME support programme.