Program to loan entrepreneurs using factoring as well as financing of franchising operations Program, developed by the "Damu" Fund, have been approved at a regular official meeting of the Board of Directors of the "Damu" Fund, chaired by Bakitzhan A. Sagintayev.
The purpose of program to loan entrepreneurs through second-tier banks using the factoring instrument is to provide alternative financing for entrepreneurs of small and medium-sized businesses. Program objectives - increase the coverage of SMEs by state support, ensuring continuous turnover of capital of small and medium business entrepreneurs regardless of the regularity of payments, attraction to program more entrepreneurs with account receivables and requiring financing, stimulation of factoring market in Kazakhstan and to ensure its transparency.
Conditions for entrepreneurs on factoring operations.
The maximum limit - no more than 150 million tenge. Duration of the factoring limit - up to 36 months. Maximum interest rate: for factoring with regress no more than 2% per month. For factory without regress - not more than 2.5% per month. The maximum size of the discount with regress - no more than 10% of the amount of accounts receivables, without of regress - no more than 20% of the amount of accounts receivable. There are no sectorial limitations.
The "Damu" Fund has been successfully implementing such tools as subsidizing of interest rates and guaranteeing on the loan, as well as funding the second-tier banks. At present small and medium enterprises have an acute need for additional financing instruments. Our analysis has shown that there is a high level of accounts receivable in companies. In addition, entrepreneurs does not always resort to the expensive bank loans. To solve this problem we have implemented program to loan entrepreneurs through second-tier banks using the factoring instrument. It will help SMEs to obtain additional funds to cover arising cash shortages, solve current business - tasks, increase turnover, etc. ", - reported Chairman of the Board of the "Damu" Fund Kanysh Tuleushin.
For reference: At present in Kazakhstan the interest rate on factoring operations is 3-4% on average, the financing amount - 80-90%, the validity of the factoring limit - 2-4 months, with the time for project consideration from 3 days to 3 weeks. As of September 2015 it was registered 17 factoring companies in Kazakhstan and at least two second-tier bank implementing a factoring tool. The level of development of factoring in Kazakhstan constitute to 0.1%, well below the average level in the EU (9.4%) and Russia (2.2%), and indicates that factoring in Kazakhstan underdeveloped.
Financing of franchising operations program.
Program aims to support entrepreneurs to create a start-up business and develop new areas of active business, using franchising, through lending to commercial banks.
Conditions for financing of franchising deals for entrepreneurs:
The maximum limit per entity of small and medium-sized businesses - no more than 80 million tenge..
The credit line - less than 84 months (7 years).
Lending purpose - purchase of complex entrepreneurial license, working capital financing for the implementation of franchising, real estate investments for the implementation of franchising, purchase of equipment by franchisee agreement, training of personnel for project realization, the introduction of franchising in the enterprise.
Interest rate - no more than 16%.
Funding currency - tenge.
There are no sectorial limitations.
The "Damu" Fund’s tools could be used within the program - subsidizing interest rates and guarantee on loan.
For reference: The annual global turnover of transactions on franchising - $ 2.3 trillion, franchise networks - 29 000, franchised outlets - 2 800 000, 33 million people engaged in franchising business. Restaurant business constitute to 35% of the total number of franchises and 60% "fast food".
"Further, in recent years we are observing great interest among entrepreneurs in opening franchises. Present conditions are forcing entrepreneurs to look for new areas of business and good conditions for funding. According to the Kazakhstan Franchise Association 450 franchising systems with the turnover - $ 2 billion was registered in 2014, franchise points- 4137, the number of employed people - 26 759 people. It is a perspective market, which will increase the number of start-up projects and improve the quality of doing business for active entrepreneurs in our country ", - concluded new head of the "Damu" Fund Kanysh Tuleushin.
For reference: Since the beginning of 2016 the "Damu" Fund increases its product line of financial support for SME. Thus in January 2016, the Fund implemented a new technology of "quick loans" - in pilot mode in Almaty and Almaty region through banks JSC "Alfa-Bank", JSC «Kassa Nova» and JSC "Bank of Astana". The basic idea of the technology - the ease of processing and speed of lending from 3 to 7 days. Three products launched within the new technology: a loan amount of up to 3 million tenge, up to 30 million tenge, and the third - designed primarily for startups, with the amount of the loan up to 20 million tenge. For all products, financing rate per annum is 14%. All managers, who work in banks under this technology, have received training in consulting agency. The "Damu" Fund plans to establish the same experience - quick loans in the regions as early as this year. By new technology of quick loans, in the first 2 months already 22 projects of entrepreneurs approved for financing, and another 15 are currently at process in STB. The banks, which works under this technology in fact fit into the six working days.