Microfinance organizations’ share of corporate financing is growing

“The share of microfinance organizations in corporate financing has been increasing over the past three years,” said Olzhas Kizatov, deputy chairman of the Financial Markets Regulatory and Development Agency. Microfinance to the business sector has doubled over the past three years and reached 1.3 trillion tenge. Most of it, or more than 35%, belongs to the Pavlodar and Kostanay regions. The money is mainly used for raw material production and electricity supply. 25% of microcredits are used to finance agriculture, 17% and 15% are obtained by trade and service entrepreneurs. The main part of the loans issued, or 932 billion tenge, is distributed by credit unions. The agency’s representative noted that incentives are the reason for the increase in microfinance organizations’ lending to businesses.

Olzhas Kizatov, Deputy Chairman of the Financial Market Supervision and Development Agency of the Republic of Kazakhstan:
– There are risk assessment factors. We reduced these risk assessment factors. We reduced them by 150% to 100%. If the factors are reduced, it will encourage MFIs and businesses to lend. Capital is freed up. There will be more opportunities for MFIs to lend the freed up funds to the business.