WRITING OF LOJSC «KAZAGROMARKETING» - OPERATOR OF EXTENSION OF GOVERNMENT SUPPORT TO AGRIBUSINESS FOR INSURANCE AND UNDERANS
Beginning from September 2014 JSC «Kazagromarketing» is operator of extension of government support to agribusiness for insurance and underwriting of loans.
Main purpose of subsidy under insurance and underwriting of loans of agribusiness is affording access of agribusiness to credit resources.
Main purposes of JSC «Kazagromarketing» as operator of extension of government support to agribusiness for insurance and underwriting of loans are:
- inspection of documents from borrowers/insurance companies against subsidy regulation;
- drafting of recommendations about accordance or discordance of borrower/insurance company project against subsidy regulation.
Why should you insure loans?
Frequently, credit provision is rather risky for banks. If credit is unprovided by collateral there is possibility of credit default. In order to minimize risks bank draws up a contract of credit insurance.
So the aim of such insurance is minimization or elimination of credit risk and protection of creditors in case of insolvency of debtor or non-payment of debt otherwise.
One of the problems of credit insurance is that banking system currently is more developed than insurance. Nevertheless, services of insurance companies have high growth potential since credit provision for bank is main and most profitable active operation.
In this case asset quality associates with many business risks and passing on part of these risks to insurer provides higher level of credit worthiness. This creates background for cutting of bank credit risk and upgrade of assets.
What is the content of subsidy under insurance and underwriting of loans of agribusiness?
Subsidies under insurance and underwriting of loans suppose reimbursement of 50% expenses on underwriting commission/insurance premium.
Subsidy under insurance and underwriting of loans is performed on basis of Rules of subsidy under insurance and underwriting of loans of agribusiness that are approved by Decree of the Government of the Republic of Kazakhstan №900 from 5 of August 2014.