The process of issuing state guarantees as collateral for a loan will soon start in the country. The “Damu” fund has already been assigned as the structure in charge of the program. However, the situation with interest rate subsidies remains unclear. It has recently become known that probably some other participant will take up a part of the bank margin.

Bulat Mukushev, CEO, “Damu” Entrepreneurship Development Fund
“There are several options. It’s clear that a special budgetary program will be created in this respect and funds will be channeled towards administrations or social entrepreneurial corporations under them. So our fund will probably be the program’s operator or financial agent meant to conduct talks with the banks while the banks will be collecting applications from entrepreneurs who meet this program’s requirements. And a coordination council will be able to approve subsidies for these enterprises accordingly. And we would look to it that the funds reached them quickly and monitor as well as follow-up these assets’ distribution.”

In addition to this, not all the businessmen of small and medium sector have an access to concessional financing. The issue of attracting liquidity is often complicated by a lack of collateral. Therefore, entrepreneurs are waiting for the “Damu” fund to start receiving applications. Experts of the entrepreneurship development fund have already worked out a mechanism of presenting guarantees. For example, a borrower has a certain amount of assets which can be pledged at the bank. However, it is not enough to receive a necessary sum. In this case, the “Damu” fund provides a kind of receipt for the rest of insufficient amount of property. If the enterprise is unable to repay the debt the bank has a right to exempt the borrower’s collateral plus the sum of guarantee presented by the fund. In the positive case scenario, no one incurs losses as a client receives money for business development; the bank obtains a remuneration sum while “Damu” will be able to present a receipt for other borrower with the undisbursed amount of guarantees.

Bulat Mukushev, CEO, “Damu” Entrepreneurship Development Fund
“We are ready to provide guarantees for projects with insufficient collaterals and banks will finance these enterprises as our guarantee is considered to be the state guarantee and the banks won’t have to form provisions for these loans.”

The reduction of administrative barriers was defined as yet another important direction in the “Business road map 2020”. In this respect, the entrepreneurial community has also presented its own suggestions on eliminating obstacles for the real sector’s work.