Islamic Bank allocated $25 million to Kazakhstan farmers

The Islamic Development Bank (IDB) has allocated $25 million for Kazakhstan farmers, Tengrinews.kz reports citing the Development Commission of Almaty Regional Financial Center of Kazakhstan's National Bank. "The Fund for Financial Support to Agriculture has started a series of training seminars on Islamic financing methods for personnel of branches and representative offices in 11 regions of Kazakhstan. The training is held by Director of Badr Finance & Investment professor Adalet Dzhabiyev who developed a methodology of Islamic micro-financing for the fund under a contract with the Islamic Development Bank," the Commission states. In 2011 the Fund and IDB signed a $10 million loan agreement. The Fund will use these money to extend loans to agricultural producers and rural entrepreneurs in line with the Islamic economic principles. The trainings will be held in Akmola, East-Kazakhstan, Karaganda, North-Kazakhstan oblast branches in the beginning of November. The new microcredit program is called Satty. "Satty program includes two microcredit products: Murabahah and Salam. They are both intended for procurement of fixed assets: agricultural vehicles, equipment, cargo transport, biological assets (horses, camels, small cattle) for selling to the borrowers on installments. They can also be used for pre-payment for future harvests or goods. The maximum loan that can be expended as part of this program is $25 thousand at 9.5 percent for up to 18 months," the Commission writes. Trained personnel is already accepting applications from farmers as part of three pilot projects in Aktobe, Pavlodar and South-Kazakhstan oblasts. Financing of the approved applications will start in the nearest time. The plan is that applications for Islamic loans will be accepted through the country starting from January 2013. By Shynar Ospanova