Kazakh banks misusing National Fund money to be fined29 april 2014, 16:55
Penalties are going to be imposed on Kazakhstani banks in case they misuse the resources provided by the National Fund, Tengrinews reports citing Lyazzat Ibragimova, Chairman of Damu Fund, a government arm for development of business in Kazakhstan.
“If the banks will be using the funds for the purposes other the those they were provided for, various types of penalties will be applied. (...) The process will be monitored and if a bank is found misusing the money, the funding will be called off," she said.
Baiterek National Holding and Damu Fund signed agreements with 13 Kazakh banks to place 100 billion tenge ($550 million) allocated from the National Fund for financing of SMEs to develop the country's processing industry.
"The Banks are not allowed to take any kind of commissions when considering the projects, even the maintenance fee. This will reduce the burden on the entrepreneurs applying for loans," she elaborated.
If an entrepreneur who was found eligible for the state support program by a bank stops repaying the loan, the bank that issued the loan will be fined for misjudging the client. The size of the fine will be determined by the Fund for every case individually.
She noted that the main problem for the entrepreneurs applying for loans, is lack of sufficient amount of property for a collateral, especially for those who need a brand new loan, not an extension. "An entrepreneur would assume that his property offered as collateral is worth 100 million tenge ($550 thousand), but the bank would evaluate it at only 80 million tenge ($440 thousand). For these cases, we will be providing additional support, but the choice remains with the entrepreneur. We are ready to provide a guarantee of up to 1.85 billion tenge ($10 million). This is to ensure that our companies can buy good equipment they need," Ibragimova said.
She reminded that to be eligible for the program a company must qualify as a small or medium-sized business, should operate in a processing industry, and should have no overdue loans or tax debts.
"The interest rate on these loans for entrepreneurs will be at 6% per annum and the limit per one company has been set to 1 billion 800 million tenge ($9.89 million)," she said.
The lending program includes all the major banks of Kazakhstan:
Kazcommertsbank and BTA Bank will share $110 million they got from the fund for the program.
Halyk Bank of Kazakhstan and Tsesnabank got $110 million each.
Bank CenterCredit got $44 million.
ATF Bank and Temirbank got $38.5 million each.
Sberbank of Russia got $33 million.
Eurasian Bank got $16.5 million.
Nurbank, Bank RBK, AsiaCreditBank and Kazinvestbank got $11 million each.
DeltaBank got $5.5 million.
The funds were allocated on the basis the size of the bank, its financial stability, its SME loan portfolio and the size of the branch network.
Reporting by Baubek Konyrov, writing by Dinara Urazova, editing by Tatyana Kuzmina