President suggests using the National Oil Fund to support S&MBs

Kazakhstan’s President Nursultan Nazarbayev has instructed its government to consider offering mild loans out of the National Oil Fund’s assets to support S&MBs, KazTag Agency reports. “Let us consider all the pros and cons of such a possibility (…) The Prime Minister and the National Bank are expected to report following a thorough study”, President Nursultan Nazarbayev said June 22 at a sitting on entrepreneurship development held in Astana. At the same meeting Ms. Umit Shayakhmetova, the Chairwoman of the Halyk Bank Board said that “if the Oil Fund money is lent to banks at the APR of 1-2%, banks could provide loans to S&MBs at 5-6%. She elaborated that within the State-run Business Development Roadmap loans to S&MBs are currently provided at 10%. Given the bank’s margin, the actual APR stands at 12-14%”. In his latest State of the Nation Address [January 27], President Nazarbayev suggested the National Oil Fund money be used in the form of loans to the national economy rather than kept with foreign banks. The National Fund of Kazakhstan was created in 2000 as a stabilization fund that accumulates windfall revenues from oil sales and ensures the economy of Kazakhstan will be stable against the price swings of oil. The assets of the National Fund assets are monitored by the National Bank of the Republic of Kazakhstan. According to the National Bank, the National Oil Fund’s assets as of the end of April 2012 reached $51 billion.