24. Kazakhstan

In 2020, SMEs made up 96.4% of all businesses in Kazakhstan and accounted for 38.6% of total employment and 31.6% of national GDP.

SME lending was on the rise in Kazakhstan between 2014 and 2017, contrary to the period from 2017 to 2019 when the SME loan portfolio showed a negative trend. In 2020, the SME loan portfolio increased by 19.3% and new lending to SMEs increased by 46%. The share of SME loans out of total business loans also rose to 32.5%. The most recent growth in SME lending is associated with the anti-crisis measures taken by the government of Kazakhstan to support SMEs during the COVID-19 pandemic period.

Interest rates for SMEs have fluctuated over the reference period, growing steadily from a record low of 11.5% in 2014 to 14% in 2016. In 2020, the SME average interest rate was 12.7%, while for large enterprises it was 11.2%. It should be noted that the increase of the interest rate in 2014 is explained by the devaluation of the national currency, as well as the increase in the base rate made by the National Bank.

Among non-bank sources of finance, leasing has the largest market and is steadily growing. In 2020, leasing and hire purchases were almost 8 times higher compared to volumes in 2010. The development of leasing is due to several reasons. Firstly, the growing need for industrial, transport and agricultural enterprises to update and expand the fleet of machinery and equipment. Secondly, many enterprises have problems with providing banks with collateral to access loans, while leasing companies are more flexible in their collateral policy. Thirdly, the procedure for making lease payments is one of the biggest advantages of leasing. The agreement may optimally take into account the interests of all parties, since the size and period of payments are determined on the basis of a joint agreement.

Non-performing loans (NPL) with arrears of more than 90 days decreased to 7.6% of the total for all business loans and to 11.9% of the total for SME loans. Commercial banks fulfil the requirement of the National Bank of Kazakhstan that sets the maximum rate of NPLs at 10% of the total loan portfolio.

An important role in keeping up SMEs’ access to credit is played by the state, which places funds in commercial banks to provide concessional lending to SMEs during shortages of liquidity in the market. The largest placement of state funds for SME lending took place in 2018. Prior to this, the government provided KZT 200 billion in 2014-2016 to support SMEs in the manufacturing industry at an interest rate of 6% per annum, which are issued by banks on a revolving basis. Despite the fact that the largest part of the funds was allocated in 2014-2016, these funds are still used for lending to SMEs on a revolving basis. In addition, the State allocates new funds under new SME supporting State programmes.

Since 2010, the government, through “Damu” Entrepreneurship Development Fund, has provided interest rate subsidies and loan guarantees for SMEs under the “Business Roadmap” Programme. A new financial instrument in Kazakhstan, loan guarantees are becoming popular very quickly, escalating from just 3 guarantees in 2010 to over 13 000 guarantees at the end of 2020 (15 900 guarantees for the period 2010-2020). In 2020, the Government made changes in the “Business Road Map” programme and included a portfolio guarantee tool for banks.

The different categories of enterprises are provided in the Code on Entrepreneurship of the Republic of Kazakhstan and are based on the average annual number of employees and average annual revenues of companies (see Table 24.2).

SMEs make up 96.4% of all entities in Kazakhstan. As of the end of 2020, more than 1.6 million SMEs were registered in the country, including enterprises, individual entrepreneurs and farms. The major sectors of work among SMEs included wholesale and retail, services and agriculture.

As of the end of 2020, SMEs employed 3.4 million people in Kazakhstan, or 38.6% of the total employed population in the country. SMEs produced a total output of KZT 32.7 trillion in 2020 and contributed 31.6% to the country’s GDP.

In 2020, new lending to SMEs increased by 46% compared with last year, and the outstanding SME loans also increased by 19.3%. This raised the share of SME loans in total outstanding business loans from 27% to 33%. At the same time, the share of new SME lending in total business lending also grew in 2019 to 25%.

The main reason for the boom in lending is anti-crisis measures taken by the government of Kazakhstan to support SMEs in COVID-19 pandemic period. As part of the anti-crisis measures, industry restrictions were lifted and the rate on the final borrower was unified to 6% in frame of government program “Business road map 2025”. So SMEs of all industries had access to guarantees and subsidies.

The National bank of Kazakhstan conducts a quarterly survey of the heads of banks who are responsible for formation of the general credit policy and (or) risk management. The purpose of the survey is to assess trends in changes of supply and demand of loan resources and risk management systems. According to the results of survey, in 2007-09, terms for SME lending by banks tightened. This was generally expressed through higher interest rates and collateral requirements. In 2010-13, when the economy and consumption were growing very rapidly, and the amount of deposits in Kazakhstan Tenge doubled, banks softened the terms for lending to SMEs. Since 2014, as the local currency has been depreciating, banks have reverted to tightening loan policy again.

This trend is also reflected in interest rate data. In 2007-09, SME interest rates exceeded 14%. In 2010-14 rates decreased, falling to a low of 11.5% in 2014. Since then, interest rates have climbed and have exceeded 14% in 2016. In 2020 we can see that interest rate went down to 12.7%.

Bank loans are the main source of external financing for SMEs. Among alternative sources of financing, other forms of debt financing prevail.

Since 2010, volumes of lease financing have increased steadily. In 2020, total leasing and hire purchases stood at KZT 479.3 billion, almost 8 times their figure in 2010.

The microfinance market in Kazakhstan is developing well. In 2012, the legislation “On Microfinance Organisations" was adopted, replacing the earlier “On Microcredit Organisations” law in Kazakhstan. This provided a strong growth impetus in the market. Micro financial activity is now regulated by the National Bank of Kazakhstan, which has already registered 226 microfinance organizations. In 2020, microfinance organisations provided KZT 267 billion in total microcredit for business purposes.

Until 2009, a maximum of one enterprise a year completed bankruptcy procedures. In 2009, government measures aimed to simplify the procedure of closing enterprises and as a result, resolving insolvency reduced the timeline for these processes from 3.3 years to 1.5 years. In 2020, the number of bankruptcies increased by 67% compared to 2019, amounting to 2,763 bankruptcies. The increase in the number of bankruptcies in 2020 is to a large extent explained by the COVID-19 pandemic.

By the end of 2020, the share of loans with arrears of more than 90 days (NPL) in banks’ portfolio decreased from last year. Total non-performing business loans declined from 8.1% to 7.6%, while that of non-performing SME loans declined from 14.6% to 11.9%. Thereby, commercial banks fulfilled requirements of the National Bank of Kazakhstan concerning maximum appropriate NPL level of no more than 10% of the total loan portfolio. The reduction of NPLs can be explained by anti-crisis measures, where entrepreneurs of were able to get soft loans under the “Business road map 2025” Programme. In addition, as part of anti-crisis measures, banks provided debt restructuring, and gave deferrals in case of problems associated with the pandemic.

The government of Kazakhstan has been working to ensure a favourable business climate and engage more entrepreneurs to start businesses. To expand SMEs’ access to finance, a number of programmes are in place in the country to provide concessional lending and microfinance, subsidised interest rates, loan guarantees and grants to start a business. The main operator of financial support programmes for SMEs is the Damu Entrepreneurship Development Fund.

“BRM 2025” programme has been in operation since 2010 and is administered by the Ministry of National Economy of the Republic of Kazakhstan. Initially, the focus of the programme was on supporting enterprises in non-extracting and import-substituting sectors. Over time, this was expanded to rural areas, small and single-industry towns’ entrepreneurs, who are not subject to sectoral restrictions. The programme implementation involves both central and local authorities, Damu Entrepreneurship Development Fund, Atameken National Chamber of Entrepreneurs and commercial banks. The types of support that the programme offers include interest rate subsidies, loan guarantees, grants, training and consulting assistance; and meets the basic needs of entrepreneurs, making “BRM 2025” the most popular government programme.

In order to ensure greater coverage of enterprises by the state support, in 2020, the government introduced new mechanism of portfolio guarantees and subsidies in the framework of anti-crises measurements. Implementation of this mechanism provides a number of opportunities for SME and STB such as increasing the speed of obtaining a loan with a bank guarantee; reduction of time spent on the assessment and execution of collateral; competitive advantage over other banks. Also, sectoral restrictions were lifted and the final interest rate for borrowers was unified up to 6% per annum.

Interest rate subsidies are provided in several directions depending on the target segment:

  • for micro and small projects without sectoral restrictions, the maximum rate on loans not exceeding KZT 20 million consists of the base rate of the National Bank of the Republic of Kazakhstan + 8.5%, of which 6% is paid by the entrepreneur, and the difference is subsidized by the state;

  • for SMEs, the maximum rate on loans not exceeding KZT 7 000 million consists of the base rate of the National Bank of the Republic of Kazakhstan + 8.5%, of which 6% is paid by the entrepreneur, and the difference is subsidized by the state;

As of the end of 2020, contracts for subsidising were signed for 29 349 projects on loans amounting KZT 3 523 billion. Subsidies of KZT 427 billion were disbursed.

Loan guarantees are also provided with varying conditions depending on the target segment:

  • guarantees up to 85% on loans up to KZT 20 million are provided for micro and small enterprises;

  • guarantees up to 50% on loans up to KZT 1 000 million are provided for SMEs.

As a new product in the financial market of Kazakhstan, loan guarantees are quickly becoming popular. The number of guarantee contracts signed increased from 3 in 2010 to 13 358 by the end of 2020, with loan guarantees of KZT 182 billion being guaranteed for loans amounting to KZT 468 billion.

The government in Kazakhstan provided funds amounting to KZT 200 000 million in 2014-15 to provide affordable loans for SMEs in the manufacturing industry through commercial banks. SMEs can thus receive loans at a rate of 6% for up to KZT 1 850 million for a period of up to 10 years. As of the end of 2020, 2 657 projects were financed for a total of KZT 713 461 million.

Damu Entrepreneurship Development Fund implements a number of its own programmes, which are financed from the company’s own capital or by raising funds from local authorities and international financial organisations. Within the framework of regional programmes, loans are granted at a rate of up to 8.0% in priority sectors, which are determined depending on the specifics of the economy of each region. Within the framework of international programmes, loans are issued on market terms and without sector restrictions.

In terms of its own programmes, Damu Fund and its partner organisations (banks, leasing companies, microfinance organisations) have financed more than 55 112 projects for KZT 837 756 million as of the end of 2020.

In 2017, Damu Fund along with other state organizations started working as an operator of the “Programme for the development of productive employment and mass entrepreneurship for 2017-2021 - Enbek”. Damu Fund is responsible for providing soft loans with a rate of up to 6% per annum for entrepreneurs in urban areas. As of the end of 2020, 4 227 projects in urban areas were financed for a total amount of KZT 56 330 million.

Damu Fund also attracted funds from UNDP amounting to USD 3 million to stimulate investments in urban energy efficient projects, in 2017. The funds are used to provide interest rate subsidies or loan guarantees for SMEs. At the end of 2020, 38 projects were signed on the total amount of loans of KZT 2 649 million.


National bank of RK, “Statistical bulletin” (2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018-2020)


National bank of RK, “Current state of banking sector of the Republic of Kazakhstan” (2013, 2014, 2015, 2016, 2017, 2018-2020)


National bank of RK, “Interviewing banks about credit policy” (2013, 2014, 2015, 2016, 2017, 2018-2020)


“Damu” Entrepreneurship Development Fund, Annual reports (2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017-2019)


Committee on statistics of Ministry of national economy of RK – Small and medium-sized entrepreneurship, Statistics of enterprises



Committee on statistics of Ministry of national economy of RK, “On services rendered in the Republic of Kazakhstan” (2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018), “On leasing activities in the Republic of Kazakhstan” (2014, 2015, 2016, 2017-2020)


State revenue committee of Ministry of finance of RK, “The list of bankrupts on which the court's decisions declaring their bankruptcy entered into legal force as of 31 December 2018”


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