SME Development in Kazakhstan:

Integration to the Global Value Chain

2016
The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian
Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does
not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used
may not necessarily be consistent with ADB official terms.

Kazakhstan at a glance
Structure of economy

Indicators

Values

Area
Population (01.01.2016)
Economically active population
Languages

2,7 mln. square m.

17,7 mln. people
9,1 mln. people
Kazakh, Russian

Unemployment rate
Inflation rate

2,5%
13,6%

GDP

40,9 trln. tenge

($184,4 bln.)
2,3 mln. tenge
($10 510)

GDP per capita

GDP growth rate in 2015*

7.3%

9%

13%
3%

Agriculture
Mining
Education

18%

Manufacturing
Construction
Other

6%
Transport
Wholesale & retail

7.4%
4.8%

6.0%
4.2%
1.2%

2010

11%

34%

1,2%

Real GDP growth rate, %

10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%

5%

2011

2012

2013

2014

2015

The fastest growing sectors in 2015:

Entertainment (+8,1%)
Services (+6,8%)
Transport (+5,7%)

Source: Committee on statistics of Kazakhstan

Kazakhstan at a glance
The gates to the Russian and European markets
Europe
Russia
Near East

China
India

Gateway to China, India and Southeast Asia

The strategic location is between the European and Asian business centers
The main transit zone in the region
It is surrounded by a rapidly growing markets - China and Russia
3
3 of 4 Eurasian railway corridor pass through Kazakhstan

Export plays a key role in the growth of Kazakhstan's

economy
Dynamic of Export, mln. USD
100,000

84,336 86,449 84,700

80,000

Product structure of exports

9%

79,460

2%5%

Mineral prod.

4%

Chemical prod.

60,271

60,000

Metals and products

45,955

43,196
40,000

Machines and equipment

80%

Other

20,000

2009

2010

2011

2012

2013

2014

North
:
13%
export in
RK
13%of

2015
West
:
58%
of export in RK
58%

The bulk of exports is mineral products

In some regions, there is a high proportion
of non-oil exports

Mineral prod.
Products

East
:
7%
export in
RK
7% of

Centr
:
6%6%
of
export in RK

South
:
16%
of export in
RK

Chemical prod.
Metals and goods
Machines and
equipment
Other

Small and Medium-Sized Enterprises in Kazakhstan

1 252 923 operating enterprises are SMEs
3 126 492 people are employed by SMEs
48 billion USD of annual revenue is generated
by SMEs*
12 billion USD of bank loans outstanding were
provided to SMEs

Number of Enterprises

Small enterprises up to 100 employees and 1,93

mln. USD annual revenue
Medium enterprises up to 250 employees and/or
$19,3 mln. annual revenue
Large enterprises over 250 employees and/or
$19,3 mln. annual revenue

Employment

3.4%

GDP

Other

63.3
%

SME

Bank Loans

24,9
%

36.7
%

96.6
%

SME

Definition of enterprises (according Entrepreneurship

code):

72.7
%

75,1
%

Other

SME

27.3
%

Other

SME

Other

*1 USD=330 KZT

SME support activities

Activities of Damu Fund aimed at SMEs
Activities aimed
at exporters

Funding
through banks
and leasing
companies

Activities of
KazExportGarant
Education and
consultation

Subsidizing of
interest rates
Activities of
Kaznex Invest
Guaranteeing
bank loans

Results of Support Programs

Funding SMEs through banks and leasing companies
Conditions:
Manufacturing industry

Results

23 995 enterprises supported. Business loans

Other sectors

Loan amount: 5,6 mln. USD

Term: up to 120 months
Interest rate:
up to 6% per annum

totaling 4 215 mln. USD

Loan amount: 2,3 mln. USD

Term: up to 84 months
Interest rate:
up to 19% per annum

4,215
3,615

4,000
3,500

2,898

3,000
2,500
2,000

2,067
12,769

2,327
14,328

16,271

30,000

23,995
20,000

18,813

10,000

1,500
1,000
500
0

01.01.13

01.01.14

01.01.15

Loans amount, mln. USD

01.01.16

region, Astana, Kostanay, Pavlodar, and East Kazakhstan regions

39% - manufacturing industry, 33% - wholesale &

retail

Loan amounts by sectors, mln. USD

Dynamics of funding
4,500

The leading regions are Almaty, Karaganda

01.09.16

Number of projects, units

Manufacturing
Wholesale/retail
Other (services)
Construction
Transport
Agriculture
Accomodation
Healthcare
Other spheres of industry
Art & entertainment
Education
Information

1,639
1,409

400
170
169
167
118
54
29
23
22
14
0

500

1,000

1,500

2,000

Results of Support Programs

Guaranteeing bank loans
Conditions:
Small-towns, single-industry
towns and districts

Results

2 286 projects supported on total amount of

Priority sectors

For all priority sectors up to

For start-ups up to 85% on
50% on loans up to 1,1 mln.
loans up to 60,6 thous. USD
USD
For operating SMEs up to 50% For manufacturing industry up
on loans up to 545,5 thous. USD to 20% on loans up to 5,6 mln.
USD

300

4,000

248
198

200

2,286

150

116

100
50
0

70

48

1,646

01.01.14

01.01.15

Loans amount, mln. USD

17.10.16

Number of contracts, units

Manufacturing

2,500

Agriculture

2,000

Accomodation

460
454

Transport
Other (services)

500

01.01.16

Zhambyl, North - Kazakhstan, Almaty and

Kostanay regions
34% - manufacturing industry, 20% - transport
and warehousing

3,000

1,000

262

01.01.13

3,500

1,500

705

114

The leading regions are East Kazakhstan,

Contracts by sectors, units

Dynamics of the results

250

credits 248 mln. USD, 106 mln. USD of

guarantees were given

141
128
124
108
48
27
17
11

Healthcare
Education
Art & entertainment
Other spheres of industry
Information
Construction
0

200

400

600

768

800

1000

Results of Support Programs

Subsidizing of interest rates
Conditions:

Results

8 279 projects supported on total amount of

Subsidy size:
For SMEs in small-towns, single-industry towns and districts 10%
(of total rate up to 19%)
In the primary sectors 7% (of total rate up to 19%)
In the manufacturing industry 10% (of total rate up to 19%)
For exporters 6% (of total rate up to 19%), in foreign currency 5%
(of total rate up to 12%)

6,000

15,000

4,103

4,000
3,000
2,000
1,000
0

2,050
2,286
01.01.13

2,701

3,315

4,792

12,500
10,000

8,279
6,778

5,183

7,500
5,000

3,369

01.01.14

2,500

01.01.15

Loans amount, mln. USD

01.01.16

The leading regions are Pavlodar, East and South

Kazakhstan, Aktobe and Karaganda regions

32% - manufacturing industry, 25% - transport

and warehousing

Contracts by sectors, units

Dynamics of the results

5,000

credits 4 792 mln. USD, 411 mln. USD of

subsidies paid out

17.10.16

Number of contracts, units

Manufacturing
Transport
Other (services)

579
518
470
310
200
189
73
46

Agriculture
Healthcare
Accomodation
Education
Other spheres of industry
Art & entertainment
Information
Construction
0

1,128

2,096

2,670

500 1,000 1,500 2,000 2,500 3,000

Results of Support Programs

3rd direction Reduction of currency risk (Subsidizing)
Conditions:

Results

Subsidy size:

300 projects supported on total amount of credits

1 145 mln. USD

The leading regions are Kostanay, South, North

For exporters:
in KZT - 6% (of total rate up to 19%),
in foreign currency 5% (of total rate up to 12%)

and East Kazakhstan, Akmola and Karaganda

regions

77% - manufacturing industry, 16% - Services

Contracts by sectors, units

Dynamics of the results

500

1,400
1,200

964

1,000
800

1,117

1,145

272

288

300

213

169

400

49

300

12

Transport
200

Agriculture
100

200
0

230

Manufacturing
Other (services)

724

600
400

1,103

01.01.13

01.01.14

01.01.15

Loans amount, mln. USD

01.01.16

17.10.16

Number of contracts, units

Mining

Water supply sys.

50

100

150

200

250

10

Integration of exporters supported by Damu Fund

with other countries
Number of exporting companies
by exporting countries, unit
Russia

The distribution of exporting companies by

number of countries, unit
41

Uzbekistan

29

Kyrgyzstan

23

Tajikistan

23

China

15

Europe

14

1 country

108

2 countries

12

5 countries

12

3 countries

10

6 countries

Azerbaijan

4 countries

Belorussia

10 countries

Georgia

Turkey

7 countries

Mongolia

8 countries

Ukraine

9 countries

15

30

45

60

120

Exporters - customers of "Damu" Fund sent their products:

mainly to Russia, Uzbekistan, Tajikistan, Kyrgyzstan and China

11

The export structure of Damu Customers

Country

Russia, Kyrgyzstan,
Uzbekistan, Tajikistan

China

Turkey

Europe

Georgia

Name of the exporting product

grain products, wheat, barley,
flax seeds, meal, cotton hulls
mineral and drinking water,
Cooking and technical salt,
fruit and vegetable and flower production,
insulating materials, electrical insulating varnishes
liquid ammonia, ammonium nitrate,
starter batteries, stationary batteries and diesel,
GRP pipes and plastic products
capacitor equipment
packaging products made of polypropylene and polyethylene,
chocolate products,
flour products,
flax, peas, seeds, felt,
semifinished "wet blue" skins of cattle and goat,
leather, raw skin protein waste
fruits and vegetables,
polypropylene and polypropylene bags,
semifinished "wet blue" skins of cattle and goat,
leather, raw skin protein waste
Frozen fish fillets (pike, carp, soybean, and others.)
Fruit and Vegetable Products,
packaging products made of polypropylene and polyethylene
chocolate products,
felt, washed wool, textiles, liquid ammonia
capacitor equipment
plant protection products and fertilizers, wheat

12

Unified program of entrepreneurs competence increase

I. Support of aspiring business

III. Support and development of

entrepreneurship of people with disabilities

Support of opening the new business

on 17 May 2016:
697 people have been trained,
410 consultation support provided,
19 private entrepreneurships registered,
Participants of the project submitted 13 applications
for receiving the guarantee of the Fund on second
tier banks loans,
2 applications of the project participants have been
approved for receiving the state grant within the
Unified programs of business support and
development BRM-2020.

Damu Komek Project

2,048 applications submitted, support on
1,653 applications provided
101 applications submitted in 2016, support
on 87 applications provided
Implementation of the Development of
entrepreneurship skills of women with
disabilities Program is planned in 2016

Support of entrepreneurial initiatives of college

students on 17 May 2016: 528 people have been
trained.
II. Support and increase of competitiveness of the
existing business

IV. Monitoring of services on maintenance

of doing business and training of SME top
management within the frames of the
Unified program of BRM- 2020

Purpose of the program: assistance to development and

increase of competitiveness of existing local business
objects
Main directions of support:

Diagnosis of companies, determination of current

state of the company and allowing to reveal the
difficulties of company development;

Development of the companys Development

Strategy and development of Action Plan (choice of
support types individually for each company)

Monitoring of maintenance support

services
SME top management training
component
It is planned to train 420 people in
Nazarbayev University in 2016

V. Creation of conditions for qualitative

development of local entrepreneurship
Providing the Funds infrastructure
activity on entrepreneurship support
of CES and MCES on 01.05.2016.
Total quantity of clients 199,226
clients, including:
- CES 167,437 clients
- MCES 31,789 clients
Total quantity of services 341,302
services, including:
- CES 293,232 services
- MCES 48,070 services
Promotion of ideas and
entrepreneurship support programs
The Exhibition Made in Kazakhstan
took place on 6-8 May 2016, it is
planned to arrange KazFranch
exhibitions, CICA business forum,
women and youth entrepreneurship
forum
Distance support of
entrepreneurship development
Distance consulting services have
been provided to 10,166 clients of
the Call-Center
Distance education development
program

13

Export support instruments of KAZNEX INVEST JSC

Directions

New instruments

Plans

Strategy

Analytical support
Export promotion strategy
The international cooperation
www.export.gov.kz

Country strategies
Export specialization of regions

12 Country Strategy
Reviews 5 branches
Export Guide to 7 countries
Country profiles on 7 markets
Analysis of all the regions of Kazakhstan

Network of Foreign Agencies

Pre-export financing and
insurance

2 overseas offices (Bishkek, Novosibirsk)

13 presentation events
6 Action on Humanitarian Procurement
Trade missions in 7 countries
5 National stands
37 Exhibitions

Promotion

Trade missions
Foreign exhibitions
National stands
Trademarks
Humanitarian procurement

Development
Reimbursement of expenses:

- Certification of products;
- Registration of products;
- Maintenance of representative offices abroad;
- Participation in international exhibitions;
- Advertising and dispensing products;
- Advertising abroad;
- employee training;
- Attracting franchise;
- The creation and launch of a website;

Regional Councils exporters

Conducting webinars for exporters

4 Regional Councils Exporters

Educational activities for 30
exporters
7 guidance materials "To assist
exporters"
7 webinar for exporters
200 million. Tenge
reimbursement

Solving of problematic issues

Training and study tours
instructional materials
Packaging

14

Supporting instruments of KazExportGarant JSC

Insurance against political and / or commercial risks

Insurance credit
of exporter

Documentary
Credit Insurance

Advantages
For exporters
Receipt of export earnings immediately upon
shipment
Granting deferred payment on attractive terms
The increase in volumes and the expansion of sales
geography
The calculations through banks that serviced
exporters (speed and convenience)

Export trade
financing

Insurance of
abroad
investments
Advantages
For importers

Attractive financing terms on contracts for the

purchase of Kazakhstan goods
The possibility of obtaining a longer deferred payment

15

The needs of enterprises - exporters

According to a survey of non-raw material business sectors that are involved in the programs of
"Damu" Fund:
90% of respondents use the land transport modes (rail, road) for export production
The geography of exports is dominated by the CIS countries - more than 60% of respondents
supplied their products in these countries; 15% - to the EU, 11% - in Asia
65% of respondents provide goods to end-use, 20% - semi-finished products, 15% - raw materials

Opinions of entrepreneurs-exporters about additional support measures:

Information support (on the export duties on, procedures, etc.)
Help in finding partners
Subsidizing / compensation costs, including arising from the calculations in the currency of
transport costs
Tax benefits, reduction of customs tariffs
Providing railroad car transport
Combining certifying organizations on the principle of "one window"
Initiation of the conclusion of and compliance with international agreements, the support of the
embassies
16

16

Thank you for your attention!

Head office: 111 Gogol Str., Almaty 050004
Tel: +7 (727) 244-55-66, 244-55-77
Call-Center: 1408
Fax: +7 (727) 278 07 76
E-mail: info@fund.kz
Website: http://www.damu.kz
Business Portal: http://business.gov.kz