Damu - ANNUAL REPORT 2018

MAIN ACTIVITIES

GOALS FOR FUTURE PERIODS

ANNUAL REPORT 2018

CONDITIONAL

Also, in

2018, funds to the amount of

In accordance with the Fund’s Strategy, the

ALLOCATION OF FUNDS

KZT 10.3 bln were obtained from the Eu-

following activities were held in 2018:

ropean Bank for Reconstruction and De-

1) developed a tool for conditional allocation

In 2018, loans for a total of KZT 273 bln

velopment for the economy of Kazakhstan

of funds in STB for subsequent financing of

were provided to 18,656 borrowers through

against the guarantee of the Fund for “Kas-

SMEs carrying out entrepreneurial activity in

the conditional allocation of funds to STB,

sa Nova Bank” JSC and “Bank CentrCred-

the sphere of e-commerce, digital platforms

MC and LC .

it” JSC. In 2018, a total of KZT 16 bln was

and their ecosystems;

provided to 2,176 small and medium-sized

2) developed a tool for conditional alloca-

tion of funds in credit associations for sub-

enterprises under the program, taking into

In 2018, a total of KZT 64.7 bln

account revolving disbursements on earli-

sequent financing of micro and small-sized

enterprises;

er allocated funds within the framework of

was deposited into STB and

3) as part of the optimization of programs for

this program.

conditional allocation of funds, revised the

financial institutions under

terms of:

ATTRACTION AND ALLOCATION

conditional allocation programs/

— Damu-Regions 3 programs relating to the

OF BUDGET FUNDS

removal of constraints on refinancing of

products, including

loans to SMEs, constraints in the list of pri-

In 2018, the Fund continued to implement

ority branches of the economy, switching the

KZT 6.9 bln in MC.

the State Program for the Development of

interest rate of STB and SMEs from fixed to

Productive Employment and Mass Entre-

floating;

preneurship for 2017-2021 “Enbek” (herein-

— product on the financing of MC for subse-

after - Enbek program), as part of which a

Here, a serious challenge is to raise funds, in-

quent financing of micro/ small enterprises

total of KZT 13.95 bln was raised from the

cluding from sources other than the govern-

and individuals carrying out entrepreneurial

regional budgets, of which KZT 14.6 bln

ment, and deposit them into financial insti-

activity in regard to expansion of the target

were allocated in 9 STB/ MC (taking into ac-

tutions with further lending to micro, small

sector and increase of loan term;

count unallocated funds of 2017). In 2018,

and medium-sized enterprises.

— product on financing of SME leasing trans-

1,295 micro, small, medium-sized enter-

actions relating to separation from the target

prises were financed to the total amount of

ATTRACTION AND ALLOCATION

group of micro / small enterprises and deter-

KZT 15.4 bln, taking into account revolving

OF FUNDS OF INTERNATIONAL

mining conditions for their financing;

disbursements on earlier allocated funds

FINANCIAL INSTITUTIONS

— Enbek programs relating to inclusion in

within the framework of this program.

the target group of activeentrepreneurs, ex-

Under the agreement concluded with the

clusion of provision for the creation of jobs

In 2018, the Fund continued to implement

Asian Development Bank on October 13,

for MSMEs.

the Regional SME Financing Program on

2017 for opening of credit line to the amount

of KZT 72 bln against government guarantee

co-financing terms with the money of the

A TOTAL OF

regional budgets. Thus, in 2018, a total of

for financing of micro, small, medium-sized

KZT 3.07 bln of public funds were raised

enterprises through STB and MC, the Fund

raised KZT 31.9 bln taking into account unal-

from 6 Governers’ offices and deposited

into STB on co-financing terms with the

3,07

located funds of the previous year, the funds

of the Asian Development Bank to the to-

money of Samruk Kazyna Sovereign Wealth

KZT BLN

tal amount of KZT 25.4 bln were allocated

Fund JSC and Fund’s own funds totaling

OF PUBLIC FUNDS WERE

in STB/MC. In 2018, financing for a total of

KZT 8.3 bln. In 2018, within the framework

RAISED FROM 6 GOVERNERS’

KZT 39.5 bln 13,511 was provided to micro,

of the program, a total of KZT 21.5 bln were

OFFICES AND DEPOSITED

small, medium-sized enterprises under the

lent to 489 small, medium-sized enterpris-

INTO STB ON

program, taking into account revolving dis-

es, including revolving disbursements re-

CO-FINANCING

bursements on earlier allocated funds as part

lated to the funds earlier provided under

TERMS

of this program.

this program.

ANNUAL REPORT 2018

In addition, in 2018 the Fund completed all

1) within the framework of 2020 BRM, 1,432

Program was renamed into the 2020 Busi-

arrangements to implement SME financing

projects were supported to the amount of

ness Road Map Entrepreneurship Support

tool based on the “Islamic financing” prin-

KZT 173.16 tenge worth of loans, paid subsi-

and Development State Program;

ciples, which are planned to be implement-

dies made up KZT 39.9 bln;

2) industry-specific constraints were re-

ed in 2019: rasing funds in the amount of

2) under Nurly Zher State Program, support

moved from the projects implemented with-

USD 40 bln from Islamic Corporation for

was provided to 32 projects to the amount

in the framework of public-private partner-

the Development of the Private Sector was

of KZT 24.4 bln of loans, paid subsidies made

ship agreements;

approved, tool implementation mechanism

up KZT 1.6 bln;

3) Regional Coordination Council was ex-

was identified with the National Bank of the

3) under the framework of Program for Sup-

cluded from the guarantee approval process;

Republic of Kazakhstan, including by issue

port of Energy Service Initiatives in the cit-

4) guarantee can be obtained in one of the

of “Sukuk” Islamic bonds by subsidiary com-

ies of Kazakhstan

“Sustainable Cities for

following ways;

pany(ies) of Holding (DBK-Leasing JSC), op-

Low-Carbon Development”, 6 projects were

•

before contacting STB, i.e. firstly, the

erators who will finance the SME projects

supported to the amount KZT 0.8 bln of

entrepreneur receives the Fund’s decision

on the terms and conditions stipulated by

loans, paid subsidies made up KZT 0.002 bln.

on provision of guarantee, after that he

the Fund were established.

contacts the STB for a loan;

GUARANTEES

• after the decision is made by STB;

SUBSIDIES

• within the framework of the portfolio

In 2018, the Fund provided support on guar-

guarantee. The Fund and the STB sign

Partially subsidizing interest rates for new/

antee tool:

an Agreement, as part of which the STB

existing loans/financial leasing contracts is-

1) under the framework of 2020 BRM, a to-

establishes a limit for independent guaran-

sued to implement new efficient investment

tal KZT 48.605 tenge worth of loans was

tee for loans.

projects, as well as projects aimed at produc-

granted to 1,191 projects, the amount of

5) corrections pertaining to interest rates,

tion modernization and expansion.

guarantee made up KZT 18,857 bln;

that specify its cut-off date were made:

2) under the framework of Enbek program,

Subsidized interest rates are provided under

a total of KZT 5.611 bln worth of loans was

the 2020 BRM. In the course of the 2020

granted to 488 projects; the amount of guar-

BRM, subsidizing loans have become pop-

antee made up KZT 2.870 bln;

ular among entrepreneurs, proving to be an

3) under the framework of Damu Optima Pro-

effective tool for channeling loans to priori-

gram, a total of KZT 11.081 bln worth of loans

ty sectors of the economy.

was granted to 265 projects, the amount of

guarantee was KZT 6.584 bln;

PROJECTS

In order to diversify the economy, increase

4) under the framework of “Sustainable Cit-

WITHIN PROGRAMS

the growth rates of production volumes, re-

ies for Low Carbon Development in Kazakh-

duce the cost of manufacture of products,

stan” Program for Support of Energy Service

“SUSTAINABLE CITIES

that is development and functioning of the

Initiatives in the cities of Kazakhstan, a total

FOR LOW CARBON

processing sector, a mechanism for financ-

of KZT 0.158 bln was granted to 6 projects,

DEVELOPMENT”

ing of priority projects to ensure long-term

the amount of guarantee was KZT 0.064 bln.

SUPPORTED

tenge liquidity was implemented: a total

volume of financing of STB in 2018-2020

The following changes on guarantee tools

to support private entrepreneurs carrying

were made to 2020 Business Road Map En-

out activity in the processing and agricul-

trepreneurship Support and Development

tural sectors makes up to KZT 600 bln. At

Unified Program approved by the resolution

“Guarantee can be provided for loans with

the same time, for subsiding within this

of the Government of the Republic of Ka-

nominal interest rate not exceeding the

Mechanism, KZT 30 bln were provided from

zakhstan, which significantly improved the

base interest rate of the National Bank of

the Republican budget.

terms and simplified the process of obtain-

the Republic of Kazakhstan, increased by

ing the guarantees:

5 (five) percent points at the date the de-

In 2018, the Fund provided support for sub-

1) 2020 Business Road Map Entrepreneur-

cision is issued by the bank on entrepre-

sidizing tool:

ship Support and Development Unified

neur’s project.”;

ANNUAL REPORT 2018

6) regardless of loan amount, all entrepreneurs

the right to independently decide on grant-

sends the copies of the bank loan agreement

can submit an electronic request for guarantee

ing guarantees without additional approval

to the Fund;

through “e-government” web portal;

procedures with the Fund.

3) the Fund executes and signs a guarantee

7) form of a document that confirms registra-

agreement which is sent to the STB;

tion of individual entrepreneur was refined.

Procedure for the portfolio

4) STB signs the guarantee agreement,

guarantee is as follows:

ensures its signing by entrepreneurs and

Modifications were made to guarantee tool

1) in accordance with procedure estab-

sends the signed guarantee agreement to

in 2020 BRM and Enbek program, which help

lished by internal documents, the STB in-

the Fund.

to issue guarantees within the framework of

dependently reviews application from en-

portfolio guarantee.

trepreneur, carries out complex expertise

The use of this form of guarantee is possible

(financial status, collateral security) of bor-

in the event the Fund and the STB conclude

Portfolio guarantee is a form of providing

rower and project;

an Agreement for portfolio guarantee, with-

guarantees to entrepreneurs in the limits es-

2) if the STB makes a positive decision to

in which limit, terms and conditions of the

tablished by the Fund, within which STB has

grant a loan with the Fund’s guarantee, it

possible guarantee are established.

Mangystau region, Wind-Powered Generating Plant. “BEST - Group NS”. Project for the production of electricity from renewable energy sources.

The company has received support through the subsidy and guarantee instruments in the framework of the 2020 BRM

ANNUAL REPORT 2018

RESULTS OF FINANCIAL PROGRAMS

% of target

Actual 2016

Actual 2017

Target 2018

Actual 2018

reached

Loans granted to entrepreneurs through conditional allocation of funds to STB/ MC/ LC

Number of participants, persons

10 145

8 305

8 303

18 656

224%

Amount of financing, KZT mln

247 275

230 469

186 850

272 912

146%

Subsidized interest rates

Number of participants, persons

2 121

2 310

1 156

1 470

127%

Loan amount, KZT mln

331 879

275 660

198 380

100%

Loan guarantees

Number of participants, persons

979

1 320

3 900

1 950

50%

Loan amount, KZT mln

27 474

42 811

65 455

* The target is established only under the framework of Nurly Zher Residential

Construction State Program in the amount of KZT 70 bln

FINANCIAL PROGRAM MONITORING

Information on monitoring projects within the framework of the Fund’s financial programs, as well as through agency agreements and other contracts,

where the Fund performs monitoring functions

Actually checked (number of projects)

Monitoring description

2014 г.

2015 г.

2016 г.

2017 г.

2018 г.

Monitoring projects under the Conditional allocation

1 021

947

226

2 334

1 237

programs of the Fund (17 programs)

Monitoring projects under the Programs for supporting SMEs in the

606

725

576

819

Processing sector (funding provided by the National Fund of Kazakhstan)

Agency agreements on monitoring projects of the Unified Accumulative

777

737

Pension Fund, or UAPF (NB, DBK)

Monitoring of subsidized projects

1 576

1 792

3 068

2 595

1 814

Monitoring of guaranteed projects

440

1 170

989

1 655

Monitoring of grants

397

193

406

183

522

Total

3 045

3 978

5 595

7 454

6 784

ANNUAL REPORT 2018

ACTIONS TAKEN ON WARNINGS/VIOLATIONS

Fines

Warnings regarding the

Fines accrued,

collected,

targeted use of funds, Substitution,

KZT mln

Monitoring description

Number of

warning/

violations

Number Amount Number Amount Number Amount Number Amount

Monitoring projects under the Conditional

allocation programs of the Fund (17

61,46

5,96

590,42

284,9

programs)

Monitoring of projects under the Programs

for supporting SMEs in the Processing sector

29,60

673,52

644,18

(National Fund of Kazakhstan)

Monitoring of projects of the UAPF (NB, DBK)

Monitoring results submitted to the NB of Kazakhstan

Monitoring of subsidized projects

Violations found on subsidied projects

Monitoring of guaranteed projects

17 guarantees cancelled

Notification of revealed violations sent to Regional Coordinator

Monitoring of grants

of the Program, Comptetition Committee.

Total

156

91,06

35,56

1 263,94

929,08

MONITORING PROGRAM EFFECTIVENESS

As of January 1, 2019,

2020 Business Road Map

Entrepreneurship Support and

participants of 2020 BRM

Development State Program

Interest rate subsidies and loan guarantees

have paid a total

under the 2020 BRM have a positive impact

of KZT 1.2 trln in taxes,

According to forecast data of the Fund,

on the financial performance of enterprises,

enterprises, and entrepreneurs participating

especially in the current economic

including KZT 318 bln for 2018.

in the 2020 BRM program as of January 1,

situation. On the other hand, thanks to

2019, had their combined output valued at

better performance, the government gets

KZT 18.8 trln, including KZT 5.3 trln for 2018.

more tax revenues, making the program

(Graphic 7)

more commercially and fiscally viable.

(Graphic 8)

ANNUAL REPORT 2018

Graphic 7

Graphic 8

PRODUCT OUTPUT BY PARTICIPANTS

PAID TAXES BY PARTICIPANTS OF 2020 BUSINESS

OF 2020 BUSINESS ROAD MAP, KZT BLN

ROAD MAP, KZT BLN

6 000

400

5 300

318

4 383

300

269

4 000

3 257

204

200

2 000

100

2016

2017

2018*

2016

2017

2018*

* According to preliminary data

The broad scope of the 2020 BRM and the growing interest of SMEs signify a social impact of this initiative expressed in the

creation of jobs.

Specifically, as of January 1, 2019, participants of the 2020 BRM kept approximately 319 thous. jobs and created over 94 thous. new jobs.

(Graphic 9)

Graphic 9

Support program for SMEs

NUMBER OF CREATED

in the Processing sector funded

AND SAVED JOBS, UNITS

by the National Fund of the Republic of Kazakhstan

Enterprises received various amounts of revenue coming from

participants of the Support Program for SMEs in the Processing

400 000

sector with funding from the National Fund of the Republic of

312 300

319 989

Kazakhstan: specifically, KZT 417,703 mln in 2015, KZT 748,406 mln

300 000

267 852

in 2016 and KZT 1,031,517 mln in 2017. According to forecast data of

the Fund, revenue made up KZT 1,200,000 mln in 2018.

200 000

According to the preliminary estimate, entrepreneurs who received

89 141

94 267

financing under this Program in 2018 paid a total of KZT 74,000 mln

100 000

80 778

in taxes (and KZT 63,980 mln in taxes in 2017).

According to STB and the State Revenue Committee of the Ministry

01.01.2017

01.01.2018

01.01.2019*

of Finance of the Republic of Kazakhstan, entrepreneurs who

Saved jobs

received financing from the National Fund have created and/or

Created jobs

intend to create 18.4 thous. new jobs (including 997 jobs in 2018),

* According to preliminary data

which is approximately 8 jobs per enterprise.

ANNUAL REPORT 2018

REDUCING

OF NON-PERFORMING ASSETS

NON-PERFORMING

As of January 1, 2018, non-performing assets totaled KZT 38.02 bln.

ASSETS

WERE

Structure of the Fund’s non-performing assets as of January 1, 2018:

REDUCED BY

1) direct lending

- KZT 10.12 bln (projects that received direct

financing from the Fund in the form of loans or leasing contracts

during 2004-2008)

7,570

2) other receivables - KZT 4.7 bln (receivables from financial and

KZT BLN

business activities)

3) Portfolio accepted from

“Delta Bank” JSC

(projects of end

borrowers accepted by the Fund on 28.04.2017 from “Delta Bank”

1) Repaid by funds KZT 6.732 bln, of them:

JSC under public-private partnership agreement) that makes up KZT

• KZT 5.931 bln - projects transferred from “Delta Bank” JSC (loans

15.69 bln as of 28.04.2017, the non-performing problem part of which

without collateral);

was KZT 6.4 bln as of 01.01.2018;

• KZT 0.466 bln - direct financing projects (KZT 365.9 mln on the

4) debt of “Delta Bank” JSC - KZT 6.2 bln;

direct portfolio - 207 borrowers and KZT 99.9 mln on non-performed

5) debt of “Kazinvestbank” JSC - KZT 10.0 bln:

guarantees on 57 projects);

6) performed guarantees - KZT 0.6 bln.

• KZT 0.335 bln repaid on accounts receivable (KZT 147 mln from

“Kazinvestbank” JSC, KZT 181 mln from “Astana Finance” JSC and other).

Of the total volume of non-performing assets for 2018 in the amount

of KZT 38.02 bln, non-performing assets were reduced by KZT 7.570

2) Wrote off KZT 838 mln of bad debt (on the direct financing portfolio

bln (overperformance of the challenge by 355 %), of which:

and accounts receivable).

A total KZT 7.570 bln of bad debt (KZT 6.732 bln of funds + KZT 838 bln of write-off)

was reduced in 2018, overperformance made up 355 %.

In particular, all 16 projects transferred to “Delta Bank” JSC were

repaid with funds to a total of KZT 5.931 bln without collateral.

OUTCOME

(KZT, bln)

№

Non-performing asset

Target

Actual

Еxecution, %

Direct lending portfolio and receivables

1,639

2,131

335%

Portfolio taken from “DeltaBank” JSC

5,931

Total

2,131

7,570

ANNUAL REPORT 2018

ASSET STRUCTURE

Companies where the Fund has an equity stake but does not have significant influence on their operations: MCO Econom LLP (equity KZT 12

mln, equity share - 16.6 %), MCO West Finance LLP (equity KZT 5.06 mln, equity share - 39.5 %), MCO Zhaynar LLP (equity - KZT 5.5 mln, equity

share - 36.0 %). Currently, the Fund continues to take measures to ensure voluntary liquidation of the MCOs in accordance with the decisions of

the Fund’s Board of Directors no. 72 dated July 20, 2016 and no. 77 dated February 24, 2017 on the elimination of the said MCOs.

In 2018, elimination of MCO ADAL-INVEST LLP was carried out by order no.1 dated 04.01.2018 of Republican State Enterpriese of the

Administration of Justice of Maktaaral region,Department of Justice of South Kazakhstan region,Ministry of Justice of the Republic of Kazakhstan,

elimination of MCO ADAL-INVEST LLP was registered from register of legal entities.

In 2018-2019, it is expected to complete elimination of mentioned MCOs.

IN 2018,

ESC CONSULTANTS

FACILITATED A TOTAL OF

6410

PROJECTS

BEFORE APPROVAL

BY STB,

MC AND LC

CUSTOMER SERVICE

2018, in order to improve customer

service in the Entrepreneur Service Centers

(hereinafter

- the ESC) and increase the

number of customers of the Fund as well

as to exclude duplication of functions with

services implemented within the framework

of 2020 BRM, the Fund developed a new

concept of ESC and Mobile business support

centers, within which the functionality

West-Kazakhstan region, “KazStroyMarket” LLP. Project for the production of dry building mixes.

The company has received support under the “Damu-Ondiris” Program

of ESC consultants was changed. Thus, in

ANNUAL REPORT 2018

accordance with the new concept, the

opportunity for start-up and existing projects

2018, this training was completed by

main functional objective of ESC and

that do not have sufficient pledge or resources

5,635 individuals.

Mobile Centers of Entrepreneur Service

for start-up of new project, to publish and

consultants is to support the projects of

present the project on the platform for raising

AGENCY NETWORK

private entrepreneurs up until applications

a loan and/or guarantee of the Fund and

for joining the Fund’s programs are

collect resources for project start-up.

2018, the Project “Agency Network of

approved in STB, MC and/or LC. In 2018,

DAMU Entrepreneurship Development

ESC consultants facilitated a total of

DISTANCE LEARNING

Fund JSC of Employees of Second-Tier

6,410 projects before approval by STB, MC

Banks” was developed and implemented

and/or LC.

Distance learning within the framework

(hereinafter - the Project), which is aimed at

of the project

“Remote Support of

material encouragement of credit managers/

As part of quality improvement of provided

Entrepreneurship Development” aims to

specialists of partner bank branches for

service, CRM Sensors were installed at the

encourage entrepreneurship and improve

granting loans to micro, small and medium-

desks of ESC managers, which provide the

business competences of the public in

sized businesses using the tools for state

possibility for audio and video recording

regions of Kazakhstan.

support of entrepreneurs.

of consultations with customers and

customer evaluation. These units enable

The goal of distance training of first-

Under the terms of the Project, an amount

assessment of service quality, customer’s

time entrepreneurs is to give necessary

is paid for each use of state support tool.

satisfaction and, if necessary, analyze the

knowledge

fundamentals

course of consultation by records. Thus,

entrepreneurship and instill business skills

Under the terms of the Project, this form for

all consultations must be completed with

so that potential entrepreneurs become

encouragement of partner bank employees

assessment on CRM Sensor notepad. In

interested in opportunities for opening

can be applied in the event the Fund and

2018, customer satisfaction with quality of

their own businesses.

partner banks conclude Agreements for

provided services was 99.5 %.

Cooperation under the framework of the

The goal of distance training of existing

Project.

To implement the Development Strategy

entrepreneurs is to deepen the knowledge

of DAMU Entrepreneurship Development

and expand practical business skills,

MONITORING

Fund JSC for

2014-2023, the Fund has

including use of marketing tools to increase

OF SERVICE SUPPORT

implemented a feeback system at its

sales volumes, track the results of financial

IMPLEMENTATION

corporate website, which helps to assess the

and business operations and management

AND SME

quality of services provided to the Fund’s

projects as well as to impove skills on building

TOP MANAGEMENT

customers,

receive

recommendations,

and management of sales department.

TRAINING

reviews and proposals from customers,

identify cases of abuse of official position,

Distance learning provides an opportunity

The Fund continues to monitor the

cases of fraud as well as to provide prompt

to everyone interested to continuously

component

“SME Top Management

online consultation.

improve their professional standards

Training” and the tool “Provision of service

regardless of student location conditional

Cooperation with crowdfunding/

only upon availability of the Internet. In

support for existing entrepreneurial

crowdinvesting platforms.

the process of this training, entrepreneurs

activity” under the framework of 2020 BRM.

On July 18, 2018, DAMU Entrepreneurship

independently study educational materials

Development Fund JSC and “STARTTIME”

in interactive mode, perform practical

2018,

424 individuals took SME Top

LLP

(start-time.kz crowdfunding platform)

activities, and take tests. Upon successful

Management Training was, service support

signed a Memorandum of Understanding

completion of tests, trainees recieve

was used by 42,845 small and medium-sized

and Cooperation. This cooperation offers an

training completion certificates.

entreprises, that received 58,233 services.

ANNUAL REPORT 2018

CONTACT CENTER

Also, the Fund’s Contact Center continues its work - the center for processing of requests from entrepreneurs and individuals and informing

them in the Fund’s interests via various communication channels.

In 2018, employees of the Contact Center consulted 70,885 customers, 37,208 (52 %) of them were private entrepreneurs. 34,654 individuals

registered in BPM system.

DEVELOPMENT OF INFORMATION

TECHNOLOGIES IN THE FUND

In 2018, the Fund continued to automate

and management of office premises were

Project

monitoring

procedures

internal business processes. At the end of

converted to digital format. Documents are

were automated. The main procedures

2018, the automation level reached 92 %.

signed using electronic digital signature

for monitoring projects of private

In particular, the following key results were

without use of paper records.

entrepreneurs in bpm’online sales system

achieved.

Works on automating accounting

were systematized. Capability for filling

processes, such as collaterized property,

out monitoring reports when travelling to

raised loans, accounts payable and

remote areas of project implementation was

receivable as well as reporting, were

enabled when connected to the Internet.

AT THE END OF 2018,

completed. Thus, excessive paper document

9) Monitoring of key indicators of executive

THE AUTOMATION

flow was excluded.

employees activity was automated.

LEVEL

5) The process of separate income and

10)

Correspondence with external

REACHED

expense accounting of the Fund was

counterparties was also converted into

automated. It provides the possibility

digital format. All outgoing correspondence

to receive data to assess the cost and

is signed using electronic digital signatures.

profitability of programs implemented

11)

Subsidizing business process was

92%

by the Fund

(including out of funds

automated. Currently, the entire process

received from the Republican budget),

from submission of application to decision-

assess profitability of regional branches,

making is conducted in bpm’online sales

information to search opportunities for

system.

1) The action plan of Office of Internal Audit

optimization of resources usage, ensure

12) Fund raising and allocation processes

was implemented. Now, the Office of Internal

completeness and thoroughness of

were automated.

Audit launches for performance and requests

submission of reporting according to

performance reports through Electronic

distribution results with details necessary

In addition, the Fund automated submission

Document Management System. Follow-

for management decisions.

of applications for granting loan guarantees

up control was established. Previously, this

6) Procurement activity processes were

to private businesses within the framework

process was carried out via e-mail.

automated. Creation and approval of

of 2020 BRM without limits of the amount

Electronic archive module was

technical specifications for purchasing

as well as for partial subsidizing of loan

implemented. The module is filled with

of goods, works and services, signing of

interest rate.

scanned copies of credit dossiers of

agreement are performed in electronic

supplier’s employees. In 2019, it is planned

document management system.

Along with this, submission of applications

to add sections with archived orders and

Personnel adaptation, selection,

for obtaining of guarantees as part of Enbek

agreements.

assessment and training process was

Program on Digital Baiterek digital platform

3) Signing of material requisitions, certificates

automated. Need for use of paper records

of Baiterek National Managing Holding JSC

of acceptance and transfer of fixed assets

was excluded.

was implemented.

ANNUAL REPORT 2018

INTERNATIONAL

COOPERATION

In 2018, the Fund began to develop cooperation with new potential

partners: the Asian Infrastructure Investment Bank, the World Bank and

2018, the Fund continued to actively

the United Nations Green Climate Fund.

develop international contacts with

international financial institutions and

foreign organizations. At the level of the

Fund, the management organized visits

In order to develop innovation projects

mechanisms. Thus, in April 2018, the Fund

to the USA, Russian Federation, Republic

in the Republic of Kazakhstan, aimed to

began to implement projects jointly with the

of Belarus, Kingdom of Spain, People’s

support start-ups, cooperation with the

UNDP Kazakhstan under the “Sustainable

Republic of China. Also, the representatives

Polish Development Fund and Ernst&Young

Cities for Low-Carbon Development”

of the Fund visited the Republic of Poland

Poland was started in view of successful

program. Process of accreditation in the

and Republic of Tajikistan to meet with

Polish experience on implementation of

United Nations Green Climate Fund

entrepreneurship development institutes.

start-up initiatives of Startberry, Wavespace

for further raising of green finance to

and EYnovation.

Kazakhstan was also begun. Raising USD

These visits helped to update agenda of

40 mln was elaborated with the Islamic

international cooperation in the field of

Special attention was paid to development

Corporation for

the

Development of

the

exchange of experience and practice on

green

financing

and

Islamic

financing

Private Sector.

entrepreneurship support measures. In

particular, the Fund continued to strengthen

cooperation with the Russian SME Corporation

and SME Bank, Belorussian Fund for

Financial Support of Entrepreneurs BELARP,

Chinese Fund “Silk Way”, Chinese-European

Economic Cooperation Fund, Malaysian

Corporation SME Corp. , Korean companies

SBC and KODIT, Enterprise Singapore

agency, Polish PARP, Hungarian MBA,

Azerbaijan’s KOBIA, Japanese JICA and others.

On September

12,

2018, Road Map for

cooperation was signed between DAMU

Entrepreneurship Development Fund JSC

and KOSGEB Small and Medium-Sized

Enterprises Support and Development

Organization in Ankara, under the framework

of which practical training was organized for

employees of the Fund in KOSGEB (Ankara,

Turkey) in December 2018.

As part of attracting additional financial

sources, the Fund actively interacted with

international financial institutions, such

Asian Development Bank, European Bank

for Reconstruction and Development,

Eurasian Development Bank, Islamic

East Kazakhstan region, “Shygys Universal” LLP.

Corporation for the Development of the

Project for the processing of products and raw materials of an animal origin (fish and shellfish).

Private Sector.

The company has received support in the framework of the 2020 BRM

ANNUAL REPORT 2018

GOALS FOR FUTURE PERIODS

In 2019, the Fund plans to implement its

of KZT 1 bln The product is aimed at further

it line and allocate about KZT 40.1 bln to

Policy for sustainable development, inte-

systematic support of e-commerce devel-

STB / MC.

gration of the sustainable development

opment due to development of electronic

5) as part of implementing the programs us-

principles in the Fund’s Development

trade platforms;

ing the funds of the National Fund of the

Strategy and Key Proceses, including plan-

3) it is planned to implement the tool for fi-

Republic of Kazakhstan (tranches 1,2,3), it

ning, reporting, risk management, invest-

nancing of SMEs based on Islamic financing

is planned to distribute about KZT 14.6 bln

ments, operating activity as well as deci-

principles using the funds from Islamic Cor-

previously withdrawn by the Fund from STB

sion-making processes at all levels from

poration for the Development of the Private

among STB based on the decision of the

authorized agencies to employees.

Sector in the amount of USD 40 mln.

One of the first stages of implementing the

In 2019, the Fund plans to carry out institu-

FINANCING

sustainable development principles in the

tional development and financing of MC`s

DUE TO

Fund will be conducting training on sus-

within the Apex Department.

MEANS

tainable development issues for the Fund’s

employees, to raise awareness and improve

It is also necessary to mention the Fund’s

corporate culture.

work plans for existing programs for condi-

tional allocation of funds:

ICD

Also, in 2019 the Fund plans to complete

1) within the sales of product of conditional

automation of the main business processes:

allocation of funds in STB and LC for financ-

1) development and implementation of In-

ing SME leasing transactions, it is planned

ternet portal within the framework of Digital

to allocate roughly KZT 2 bln of the Fund’s

State Commission on the modernization of

Damu project;

resources. The product is aimed at conces-

the economy of the Republic of Kazakhstan.

2) automation of Rating model in DAMU En-

sional financing of micro and small business

6) also, in 2019, the Fund plans to raise funds,

trepreneurship Development Fund JSC;

leasing transactions;

against its own guarantee, from the European

3) implementation of iDamu project

(In-

2) in 2019, the Fund will continue to raise

Bank for Reconstruction and Development

telligence Data Analysis Management

funds from local management bodies (here-

for lending to small and medium-sized busi-

Unification).

inafter - the LMB) for implementation of

nesses in the amount of at least USD 30 mln.

individual regional programs that provide

Core business action plan:

entrepreneurs in the regions with afford-

able and long-term funding, and carry out

Conditional allocation of funds

the Enbek program. According to plan for

In 2019, the Fund plans to launch the fol-

2019, a total of KZT 22 bln will be attract-

2019

lowing products in order to implement its

ed further funding of financial institutions.

INSTITUTIONAL

Strategy:

Allocation of these funds in STB / MCs is

1) it is planned to consider the experience

expected in 2019;

DEVELOPMENT

of implementation and development of tool

3) under the framework of implementa-

AND FINANCING

for subsequent financing of transactions of

tion of the Damu-Regions III Program, it is

acquisition of intellectual property;

planned to continue to allocate roughly KZT

OF MC

2) as part of implementation of new product

4 bln of the Fund’s resources;

for financing of SMEs carrying out entrepre-

4) as part of implementing product for fi-

neurial activity in sphere of e-commerce,

nancing MSMEs using the loan from the

digital platforms and their ecosystems, it is

Asian Development Bank through STB

Subsidies and guarantees

planned to begin to distribute the money

and MC`s (4th tranche of ADB loan), it is

The Fund developed and sent draft 2020

of the Fund approximately in the amount

planned to obtain the remaining open cred-

BRM and draft Rules for review of the Minis-

ANNUAL REPORT 2018

try of National Economy of the Republic of

customer survey tools based on results of

ers, the CRM system will display a package

Kazakhstan. These drafts provide for exten-

services rendered at ESC.

of necessary documents for participation in

sion of 2020 BRM until 2025.

the Fund’s programs and schedules for re-

As to the quality of services provided at ESC,

payment of loans by customers, etc. for ESC

In 2019, the Fund will also carry out integra-

the Fund plans to hold a survey among cus-

employees. At the same time, the quality

tion with the e-government portal (egov.kz),

tomers and identify the need for changes in

control of rendered service will be carried

where private entrepreneurs will be able

existing products of the Fund, thereby im-

out by monitoring the movement and rate

to submit applications for services in elec-

proving the product line.

of consideration and progress of customer’s

tronic form.

applicaton. Thus, it is planned that all the

In order to create a comfortable environ-

above activities will allow the Fund to reach

ment when providing services to

custom-

a new level in customer service.

Pursuant to paragraph 4 of the National Ac-

tion Plan for implementation of the State of

the Nation Address to the People of Kazakh-

stan dated October 5, 2018 “Growing Wel-

fare of Kazakh Citizens: Increase in Income

and Quality of Life’ by decrees of the Gov-

ernment of the Republic of Kazakhstan dat-

ed December 11, 2018 No. 820 and Decem-

ber 29, 2018 No. 943, Credit Mechanism for

priority projects to ensure long-term tenge

liquidity (the Mechanism) and amendments

/ supplements to the Rules for partial subsi-

dizing of interest rate within the framework

of 2020 BRM were approved.

This mechanism will provide STB`s with

long-term tenge liquidity in the amount of

at least KZT 600 bln to solve the problem of

accessible lending to priority projects.

In 2019, the Fund plans to promote portfo-

lio guarantees under the framework of 2020

BRM and Enbek Program.

Customer service

In 2019, it is planned to strengthen cus-

tomer service at ESC. In order to do that,

it is necessary, first of all, to improve the

quality of services provided, the quality of

customer servicing, and to raise employees’

competence for subsequent provision of

high-quality services to customers. To im-

prove the quality of customer servicing at

ESC, the Fund plans to establish the rules

for communication of ESC employees with

Jambyl region, “Saule Confectionery Factory” LLP.

customers, taking into account capabilities

Project for the production of fresh flour confectionery products.

of the Fund’s CRM system, to introduce

The company has received support in the framework of the second line of the 2020 BRM

ANNUAL REPORT 2018