Micro-credit lending program (microfinance) for institutions for further microcredit program "Road Employment Map – 2020"

The program purpose: to stimulate employment rate, facilitation of welfare increase, reduction of unemployment.

The program direction: stimulation of business initiative and complex development support of rural communities. This direction provides business stimulation and economic activity increases through the organization or expand their own business, complex development of support rural communities.

Target group: microcredit (microfinance) organization.

Purpose: financing of MFO for the subsequent microcrediting of persons participating in the "Road Employment Map – 2020".

Maximum loan amount:

1)    per borrower – 1 000 000 000 (one billion) KZT;

2)    per one end borrower:

a)    up to 3 000 000 (three million) KZT – to organize or expansion of own business.

b)    Up to 5 000 000 (five million) KZT – for oralmans and migrants arrived to the regions defined by the Government of the Republic of Kazakhstan and included to the regional quote of oralmans and migrants acceptance;

c)    Up to 6 000 000 (six million) KZT – to organize the small-scale commodity production on the basis of the personal farm (microcredits provision up to 6 mln.KZT to organize the small-scale commodity production will be tested in 2016 in the pilot mode);

d)    Up to 5 000 000 (five million) KZT – for the Borrowers, early repaid the microcredits (more than 500 000 (five hundred thousand) KZT), at their repeated application for the microcredit to expand their own business.

Minimum loan amount: per borrower - 15 000 000 (fifteen million) KZT.

Financial instrument:

1.    For the Borrower - loan, revolving/non-revolving credit line;

2.    For the final borrowers – the loan.

Interest rate:

1.    For the borrower – 2% per annum, the annual effective rate of remuneration is not more than 2.2% per annum

2.    For end borrower - not more than 6% per annum. Annual effective interest rate for Borrower and Maximum annual effective rate for the End borrowers is to be agreed with the regional commissions.

Term for Loan/credit line:

1.    For the borrower - no more than 54 (fifty four) months;

2.    For end borrowers - not more than 54 (fifty-four) months.

The procedure for loan / tranche issuing under the credit line: According to the Rules of organization and financing of state support for business development to persons participating in active measures of employment approved by the order of the Ministry of Health and Social Development of Republic of Kazakhstan on April 19, 2015 No. 221.

Term of loan / tranche development: no more than 90 (ninety) calendar days from the loan/each tranche receipt.

Frequency of principal debt repayment: monthly/quarterly/1 (once) every six months, with the possibility of partial/full prepayment for the loan term.

Frequency of repayment of remuneration: monthly/quarterly/1 (once) every six months, with the possibility of repayment of accrued interest during the loan term of actually used period.

The grace period on principal debt repayment: Not more than one third of the loan period duration.

Security:

1.      guarantee (warranty) of the Government of the Republic of Kazakhstan, the national management holding;

2.        guarantee (warranty) of legal entities engaged in lending to small and medium-sized businesses, whose sole shareholder is the state or the national management holding;

3.        money on deposit.

Basic requirements for the borrower:

1.      solvency and financial stability;

2.      absence of arrears on taxes and other obligatory payments to the budget at the date of submission/review of applications for loans;

3.      the absence of arrears before the second-tier banks and other financial institutions in the last reporting date (month of application);

4.positive credit history (if any credit history);

5.the presence of existing automated accounting system of the loan portfolio;

6.giving the Company the documents necessary and sufficient for monitoring the end borrowers with the application of end borrowers' consents  for the Information provision of microcredit organizations (MFOs) to the Company;

7.the duration of the continuous activity on micro-credit provision in the market for at least 3 (three) months (the period is determined from the first loan date).

Basic requirements for the End borrower: receive training, except those that extend the existing business, or a previously trained in the basics of entrepreneurship, or persons who have the supporting documents on the relevant training business courses for not more than three years prior to obtaining of microcredit.

Restrictions on the project: The micro-credit is not admitted to the End borrowers for consumer purposes, repayment of previous loans for the purchase of residential real estate, as well as to carry out activities in trade.