Kanysh Izbastin, Chairman of the Board of KazAgroFinance JSC, spoke about why leasing has gained popularity among Kazakhstani farmers, and the state is taking measures to make new equipment more affordable.

- Kanysh Temirtaevich, hello! Tell us, what is the mission of KazAgroFinance JSC?

- Our company has historically been a multidisciplinary company that lent to all sub-sectors of the Agro-industrial complex and used various lending tools – leasing and loans.

Now we are focusing on leasing agricultural machinery. We have chosen this direction because it is a priority for agriculture in Kazakhstan.
 
Lending through leasing of agricultural machinery is the simplest but most effective way to increase labor productivity. The presence, for example, of a combine harvester increases the output of an economy that did not have this equipment. If there is a multifunctional and expensive combine harvester, then this has an even greater effect on increasing productivity. 
Leasing, as a method of lending, is the most understandable for customers, and for the company it is convenient because data is easily digitized, technology is calculated. 

- How widespread is the leasing of agricultural machinery among Kazakhstani farmers?

- For the full year 2018 and the last part of 2019, leasing has definitely become a popular service among customers. 

Statistics show that demand is growing exponentially. This applies to both expensive and inexpensive equipment, and does not depend on the season. It is used as part of spring field, off-season and harvesting operations. 

The result of last year showed that in comparison with 2017, the volume of leasing in monetary terms increased by 56%, and in quantitative terms by 42%.

Last year, we set a record for our company: over the past five years, agricultural machinery in the amount of 3,426 units worth about 63 billion tenge has been provided to farmers.

- What is the reason for the significant growth?

- There are two factors that influenced the development.

The first is an understanding of the need for farmers to upgrade equipment. Representatives of the agro-industrial complex understand that the equipment needs to be updated. Without modern technology, it is difficult to achieve yields that directly affect income.

The second factor is the new state support measures of the Ministry of Agriculture, which solve the issue of subsidies.

The state was able to create quite comfortable conditions for farmers and make equipment affordable. Thus, the advance is subsidized by the state in an amount equal to one-fourth of the investment, and the interest rate is financed in the amount of 10%.

- How can you characterize the principles of the company's work?

- The market approach dominates our work – everything depends on the client. The farmer decides for himself what kind of equipment and when he needs it, and we provide various options for obtaining it.

We do not focus exclusively on large farms. Last year alone, the company provided more than 3,400 units, and the vast majority went into operation for small and medium-sized farms. 

- What leasing programs are presented for clients?

- There are differences among the programs by customer categories. We provide special conditions for previously funded farmers – reliable clients with whom we have been working for several years, with whom we are familiar. We know their professional qualities and responsible approach to work. We have a simplified approach for them.  

We have a popular program "Express leasing". It involves leasing inexpensive simple equipment that is in demand, according to a simplified scheme.

We also have programs "Harvest", "Own feed", and provide secondary leasing services.

The main goal of our work on the programs is to accelerate the process of obtaining equipment. 

We understand that agriculture is a fairly traditional business. Despite the fact that everyone knows perfectly well when work begins and ends, the situation repeats itself every season. Due to the specifics, farmers come to us on the last day. 

In this regard, we are improving and transforming every year. We set ourselves the task of making the most simplified and accelerated form of access to technology. All programs are designed for this purpose.

- You mentioned the company's achievements in 2018 in the field of leasing. Tell us about how the economic indicators have changed?

- If we talk about growth from a financial point of view, then we have exceeded all the plans and tasks that the shareholder presented to us, including net income, by several times – with a large margin. 

But we pay more attention to another fact. The most important achievement not only for us, but also for the entire industry is the acceleration of the renewal of the machine–building park. Over-fulfillment of planned targets in terms of the number and cost of transferred agricultural machinery had a positive impact on the level of renewal of the entire machine and tractor fleet in Kazakhstan. This factor will affect the industry in the long term, because farmers have been using machinery for more than one year, and the result of the work done will be felt for a long time.

- How can farmers apply for a service from KazAgroFinance JSC?

- Our company is represented in all regions of Kazakhstan. Farmers who are professionally engaged in the production of agricultural products know who we are, what we do and where we are.

If an agrarian has a need for certain agricultural equipment, then he simply chooses the right model of equipment, and we begin work. 

However, I would like to note that we have certain standards for the availability of equipment. They imply a professional approach to business. For example, we cannot give a large number of combines to a small field – they are not needed there.

In our practice, there is no such thing that KazAgroFinance JSC offers a specific model. More often, we can advise the farmer about the need and quantity of the necessary equipment, analyzing the volume of areas, the financial capabilities of the farmer, his willingness to operate a particular technique.

We are open to all farmers and ready to consider all requests.

- Kanysh Temirtaevich, what strategic direction will the company follow this year?

- For 2019, we have a task, at least, to maintain last year's pace of work. The goal is to surpass the results of 2018. 

As part of lending to agricultural entities for spring field work in the first half of 2019, we noted positive dynamics and the superiority of indicators over last year's for the same period.