Small and medium-sized businesses are important sectors of the economy. Lending products remain the main financial tool in supporting and developing SMEs. Nurbank shared insights on favorable programs available to Kazakhstani entrepreneurs.
According to the national statistics bureau of the strategic planning and reforms agency of Kazakhstan, as of September 1, 2021, the number of active SMEs (small and medium-sized enterprises) increased by 3.8% compared to the same date in the previous year. Among the total number of SMEs, the share of individual entrepreneurs was 62.8%, legal entities of small enterprises – 21.1%, peasant or farm households – 15.9%, and legal entities of medium enterprises – 0.2%.
Amid ongoing restrictions due to the unstable epidemiological situation from COVID-19, supporting SMEs (small and medium-sized businesses) has become crucial, with aid from both the government and banks. For instance, loan payment deferrals. Nevertheless, lending products provided by second-tier banks remain the main financial tool. For instance, using Nurbank's programs, legal entities can obtain financing for opening and expanding businesses.
"We always accommodate our clients and offer products for the SME segment under favorable conditions," said Dina Saldanova, Managing Director - Director of the Small and Medium Business Department. "One such program is 'SME Auto', loans for legal entities to purchase any type of vehicle from passenger to cargo, as well as special equipment for farm households and road construction works. It's important for any organization to have its vehicle, especially in agriculture. If it's about special machinery, there are specific nuances considered in this product. These include the vehicle's purpose, work specialty, volumes, and so on, whereas, in standard products, vehicles fall under the 'commercial vehicle' category. Nurbank's 'SME Real Estate' program offers loans for legal entities, individual entrepreneurs, and peasant (farm) households to acquire real estate for business purposes."
The existing support measures for SMEs are often insufficient to provide financial backing for all categories of entrepreneurs. Maintaining a high level of problem loans on bank balances continues to be one of the main issues hindering their lending activity. For borrowers with overdue debts at Nurbank, there are several promotions for secured and unsecured loans, offering opportunities to reduce the debt burden under terms acceptable to debtors. For example, legal entities and individual entrepreneurs with overdue principal debt can apply for loan restructuring. The promotion includes payment deferral on the principal debt, individual repayment schedules, loan term extension, interest rate reduction, and partial cancellation of penalties in exchange for partial debt repayment. Each borrower receives an individualized approach based on their financial situation.
According to official data from the analytical center of the First Credit Bureau, alongside a decrease in business lending to individual entrepreneurs in December 2020, there was a sharp rise in retail loans extended to individual entrepreneurs (when they apply for a loan as a natural person). A significant share of this segment's growth was ensured by second-tier banks, accounting for about 70% of the portfolio. "We position ourselves as a universal bank. Thus, our loan portfolio is differentiated: equally lending to SMEs, individuals, and corporate business. We actively develop products for SMEs and participate in state programs aimed at preferential business lending," explained Dina Saldanova. "Currently, in Nurbank, you can receive financing under the preferential lending program for SMEs, as well as subsidies and guarantees from the 'Damu' Entrepreneurship Development Fund under the state program 'Business Roadmap 2025', including within the 'Economy of Simple Things' mechanism for financing priority projects. We plan to continue participating in these programs and increase lending volumes."
In recent years, state measures have actively simplified entrepreneurs' access to such instruments as subsidies and guarantees. The 'Damu' fund, acting as a financial agent, constantly seeks to improve the effectiveness of state support for SMEs through partnerships with second-tier banks. The 'Business Roadmap 2025' state program implements support tools in the form of subsidizing part of the interest rates on loans/lease agreements and guaranteeing loans. Under the 'Business Roadmap 2025' program at Nurbank, subsidy conditions are available for: supporting small entities, including micro-entrepreneurship; sectoral support for entrepreneurs/entities involved in industrial-innovative activities. The limit for one end borrower under the first direction is no more than 20 million tenge (including a limit of 5 million tenge for working capital replenishment); under the second direction, no more than 7 billion tenge for one borrower, while the loan amount for the project within which the guarantee is provided should not exceed 1 billion tenge in bank loans. The subsidy term for the first direction for investments is 3 years, and for working capital replenishment is 2 years; for the second direction for investments, it is up to 5 years, and for working capital replenishment – 3 years.
Additionally, Nurbank offers guarantees for small and medium-sized business clients. Data from the past 8 months of the current year indicate that the most popular are unsecured tender guarantees and performance guarantees. "This is due to the fact that unsecured tender guarantees are issued for participation in contests or tenders, issued quickly without collateral, which is very advantageous for clients. Performance guarantees are also issued for short terms, to pay taxes or penalties and customs payments to the customs or tax authorities of Kazakhstan. Payments are made regularly, which is why these products are in demand, unlike tender guarantees, which are a seasonal project, thus the necessity for this product arises at certain times," the interlocutor explained.
Positive dynamics are also observed in lending volumes. The growth for the 8 months of 2021 compared to 2019 was 26.50% and compared to 2020 increased by 27.80%. "To get a loan, a client needs to approach Nurbank for a consultation with a loan manager and apply for a loan. An application can also be submitted on the bank's website or via contact phone numbers. After the client submits the full documentation package for analysis and acceptance of collateral, procedures for reviewing and approving the application will be carried out. It is noteworthy that each loan application is considered individually and within the pilot project's framework can be reviewed in the shortest possible time," said Dina Saldanova, Managing Director - Director of the Small and Medium Business Department.
Source: https://inbusiness.kz/ru/news/razvitie-msb-nurbank-realizuet-vygodnye-produkty-
