SMEs’ 28.5% share in GDP contributes to Kazakh economic growth

The formation of small and medium-sized businesses is an important component of the market economy of each state; the SME segment contributes significantly to the intensive development of the country. Since the beginning of the year, an upward trend in economic growth has been observed. According to the results of the first half of the current year, the GDP increased by 4.1%, and already by the end of 11 months, the growth amounted to 4.4%, Ranking.kz informs.

One of the factors of economic growth is an increase in the share of SMEs in GDP. So, according to the results of the half-year, the share of small and medium-sized enterprises amounted to 28.5%, in general, in 2018 the share was equal to 28.4%, and in 2017 - 26.8%. The output of small and medium-sized enterprises in January-June 2019 amounted to 12.6 trillion tenge - 10.8% more than in the same period last year.

At the end of November this year, the number of small and medium-sized enterprises in the country increased by 7.8% per year, to 1.3 million. In the total number of SMEs, the share of individual entrepreneurs was 64.5%, legal entities of small business - 19.1 %, farms - 16%, legal entities of medium-sized enterprises - 0.2%.

The largest growth among small and medium-sized enterprises is observed among peasant or farm enterprises: over the year their number increased by 10.4%, to 212.2 thousand units.

According to the Ministry of Agriculture of Kazakhstan, as a whole, about 1.2 million people work in the country's agriculture. There are 464.5 thousand people in the agricultural sector. The rest are entrepreneurs and self-employed. It is also worth noting that in terms of employment, agriculture occupies a leading position, along with trade, industry and education. For 11 months of the current year, Kazakhstani people engaged in agriculture produced 4.9 trillion tenge of products and services - 671 billion tenge more than in the corresponding period last year.

At the same time, agriculture is one of the sectors most in need of continuous funding. The main support to small and medium-sized enterprises, as well as to all agribusiness entities, is provided by the National Management Holding KazAgro represented by its subsidiaries. The main work of the holding is carried out precisely at the level of small and medium-sized businesses. At the end of September of this year, the loan portfolio of subsidiaries of the NMH in the agricultural sector reached 904.7 billion tenge, annual growth amounted to 27.1%. The largest share in the ship portfolio is held by loans issued to small and medium-sized businesses: 85.7% or 775.6 billion tenge, which is 28.7% more than in the corresponding period last year (602.8 billion tenge).

At the end of 2018, the national holding allocated a record amount of funds to finance the agricultural sector: 400.1 billion tenge, of which 358.2 billion tenge - for lending. At the same time, small and medium-sized businesses account for 92% of the total volume of loans: 354.6 billion tenge. This is 35% higher than the previous year.

Among the subsidiaries of the holding, the largest share in the amount of loans for 2018 belongs to the Agrarian Credit Corporation: 64.6%, or 258.7 billion tenge. The shares of KazAgroFinance and the Fund for Financial Support for Agriculture amounted to 18.2% and 13.5%, respectively.

In general, in 2018, ACC lending increased by 68% for the year. The new strategy of the Agrarian Credit Corporation is aimed at financing mainly small and medium-sized businesses and creating the necessary conditions and incentives for this. So, the share of funding of financial institutions amounted to 51% of the total lending, or 132.3 billion tenge.

Directly credit partnerships are the main partners of the corporation, their share amounted to 57%, or 75.3 billion tenge, of the total funding of financial institutions. The share of MFIs / RICs, in turn, amounted to 3.9%, or 5.2 billion tenge.

In the meantime, financing of sustainable small agribusiness entities and medium-sized businesses is provided mainly through STBs and leasing companies. 35.6 billion tenge were credited through agro-industrial enterprises through second-tier banks, and 16.2 billion tenge through leasing companies.

Every year, the share of financing by the corporation of the agro-industrial complex through financial institutions will grow, and by 2026 it will reach 100%, which will significantly increase the availability of credit for SMEs.