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THE KEY DISTINCTION OF THE HOLDING FROM STB IS THAT IT TAKES INTO ACCOUNT AGRIBUSINESS SPECIFICS AND AGRICULTURAL INHERENT RISKS, AS WELL AS THE VALUE OF FORMED COMPETENCE OF ITS PERSONNEL

INFORMATION ON AIC SUPPORT MEASURES PROVIDED BY THE HOLDING

 

AIC financing by the Holding is mainly carried out in priority areas of AIC (livestock, meat and dairy cattle, vegetable growing, construction of grain storage and fruit storage infrastructure, processing of agricultural products, fish farming, etc.).

The main consumers of the Holding group of companies' services are peasant and farm enterprises, agricultural enterprises in the form of limited partnerships or joint-stock companies, private farm households, in fact, in most cases, officially unregistered microbusiness, processors of agricultural products and agricultural cooperatives.

ACCORDING TO THE RESULTS OF THE YEAR, THE HOLDING INVESTED

276BILLION 
KZT

IN THE INDUSTRY, WITH 92% (OR 246 BILLION KZT) FOR AGRIBUSINESS ENTITIES CREDITING. THE SHARE OF LONG-TERM LOANS AMOUNTED TO 94%.

Within the process of increasing availability of financial services for agribusiness entities and involving private financial organizations in agricultural sector crediting, the Holding is increasing its funding levels. In two years the volume of lending in this area (through funding of CC, MFO, STB and LC) increased from 21% to 37%.

CREDITING AND LEASING IN THE CONTEXT OF OPERATORS
 
PURCHASE OF AGRICULTURAL PRODUCTS OF DJSC
 

The funds directed to support agricultural producers within the existing programs of the Holding's DJSCs were distributed through credit facilities in the amount of 245,715.8 million KZT, and purchase of agricultural products in the amount of 20,278.2 million KZT.

CREDITING IN THE CONTEXT OF INDUSTRY'S SECTORS

Within the framework of crediting programs of agricultural producers the Holding's DJSCs directed

120 400, 1 
MILLION KZT
to crop production,
90 914,8 
MILLION KZT
to livestock production,
17 200, 1 
MILLION KZT
to processing industry crediting, and
17 200 
MILLION KZT
to other industries' crediting.

CREDITING IN THE CONTEXT OF THE HOLDING'S CUSTOMERS

 

As of December 31, 2017, the number of operating peasant and farming enterprises in the country amounted to

187,5 
THOUSAND
of which about
10%
annually become the customers of the Holding's subsidiaries.

CREDITING BY REGION

Crediting of AIC entities in a regional context is carried out according to incoming applications from farmers. Each regional center has branches and representative offices of the Holdi

At the same time, representative offices of the Holding's DJSCs on a systematic basis, in cooperation with local executive bodies and business communities, conduct field visits to rural districts in order to clarify current AIC programs, terms of financing, and mechanisms for agricultural products purchasing.

EXPANDING THE AVAILABILITY OF THE HOLDING'S SERVICES

Loan Portfolio
 

As of December 31, 2017, the aggregate loan portfolio of STBs and the Holding's group of companies in agriculture reached 1,317 billion KZT, with 47% of loan portfolio held by the Holding's financial institutions.

Funding of STB, MFO and CC by the Holding
 

By the end of 2017, STB short-term loans to agriculture amounted to 2% or 16 billion KZT out of 681 billion KZT (Source of information: National Bank of the Republic of Kazakhstan http://nationalbank.kz/). The main recipients of bank loans are legal entities that can provide liquid collateral. The share of peasant (farm) households in STB loan portfolio as of January 1, 2017 was less than 2%.

In 2017, the Holding increased its loan portfolio by 63 billion KZT by expanding the instruments of financial support to agricultural producers through financial institutions, including STBs. Thus, low activity of banks in agriculture is compensated by the Holding, which is funding STBs for subsequent crediting of AIC entities.

The tools offered by the Holding enable to involve STBs in industry crediting on attractive to agribusiness entities terms. Funding programs for financial institutions for subsequent financing of agricultural producers are implemented through "Agrarian Credit Corporation" JSC. As of December 31, 2017, the volume of funding of financial institutions amounted to 89,6 billion KZT or 36,4% of total volume of crediting (246 billion KZT) among 6,4 thousand agricultural producers.

Thus, for subsequent crediting of agricultural producers, the Holding managed to involve: 7 STBs, that financed31,057.7 million KZT to 237 agricultural producers, 
172 CC
, that financed 51,012.6 million KZT to 4,405 agricultural producers; 12 MFO, that financed 6,729.0 million KZT to 1,745 agricultural producers; 1 leasing company,that financed 799.4 million KZT to 7 agricultural producers.

Financing of agricultural production cooperatives (hereinafter - APC)
 

Since 2016, «Fund of Financial Support for Agriculture» JSC as of December 31, 2017, received 356 APC applications and financed 310 APCs for the amount of 3 027 million KZT, including the following sectors:

In addition, 7,390 APC participants were financed for a total amount of 22,475 million KZT. These funds were directed to the following:

Implementation of the second line of the Program for the Development of Productive Employment and Mass Entrepreneurship for 2017-2021 in Rural Areas
 
In 2017, financing agreements were concluded with 14 local executive bodies (hereinafter - LEB), the received funds amounted to
27,1BILLION 
KZT
In addition, within the framework of concluded financing agreements LEB funds were additionally allocated for a total amount of 3,068.2 million KZT to the following regions: Almaty - 820.1 million KZT, East Kazakhstan - 444.8 million KZT, Jambyl - 501.4 milion KZT, Kyzylorda - 320 million KZT, Pavlodar - 241.9 million KZT, North Kazakhstan - 185.1 million KZT, South Kazakhstan - 554.9 million KZT.
As of December 31, 2017, 6,582 loans were provided in the amount of
28,8BILLION 
KZT
Following the results of 2017 financing of start-up projects has surpassed the planned indicator 3 times, which is 16.2 billion KZT of all financed funds.

As of December 31, 2017, "KazAgroGarant" JSC issued

247GUARANTEES
for the amount of
979,4MILLION 
KZT
Implementation of investment projects
 

Since 2007, the Holding has been financing high-tech investment projects. In 2007, the Holding financed and commissioned 530 investment projects worth 334.4 billion KZT, and thus created 16.6 thousand jobs. As of December 31, 2017, the Holding's investment portfolio included 570 investment projects worth 376 billion KZT, including those financed by the funds borrowed from the National Fund. Holding approved for financing 242 investment projects worth 225 billion KZT. 17.2 thousand jobs were created for the period of operation.

At the same time, in 2017, 31 investment projects with a total cost of

36BILLION 
KZT
were put into operation, of agricultural and
972JOBS WERE 
CREATED
Full implementation of these projects will allow to achieve the following results:
Crediting for spring field and harvesting works
 

In 2017, within the framework of budget program No. 262, about 1,816 agricultural producerswere financed with 60 billion KZT for spring field and harvesting works, which allowed agrarians to conduct a sowing campaign on 3,003 thousand hectares. The drawdown of funds is 100%.
In addition, within the framework of «Agribusiness» program for spring field and harvesting works, about 357 agricultural producers were financed with 7.3 billion KZT, which allowed agrarians to conduct a sowing campaign on 897 thousand hectares.

Leasing of agricultural machinery and equipment
 

In 2017, contracts for acquisition of 2,408 units, special machinery and equipment were concluded for the amount of 40,176 million KZT.

Financial result
 

In 2017 the Holding's group of companies received loss in the amount of 126 billion KZT on consolidated data.
This financial indicator was influenced by such factors as, the effect of negative exchange rate difference and adverse consequences due to default in the banking sector.