National Holding ‘KazAgro’ Engages Banks For Financing Of 2016 Sowing Campaign
National Holding ‘KazAgro’ started preparing for sowing campaign of 2016. The Holding’s primary goal is to finance the forthcoming spring field and harvesting campaigns – maximum extending the opportunities for the domestic agricultural producers for obtaining the credit resources. KazAgro held the meeting with the representatives of 11 second-tier banks for this purpose, in the course of which the issues of financing the farms and agricultural entities of the republic through the wide banking branch network were discussed.
The individual attention was given to the possibility of more participation of the second-tier banks in support of the incipient cooperative movement in the agricultural sector. The meeting took place in Almaty city at the platform of Financiers Association of Kazakhstan. For information, for the forthcoming sowing campaign and as a whole for support of the agrarians in the course of the spring field campaign of 2016 National Holding ‘KazAgro’ is going to allocate KZT60 mlrd. of budget facility, which are supposed to be distributed between the subsidiaries of the Holding and the second-tier banks as loans.
Moreover, the companies within the Holding ‘KazAgro’ will allocate owned and raised funds for financing of the farms and agricultural entities, as well as leasing of agricultural machinery. For example, last year the aggregate financing by the main development institution in the agricultural sector of the sowing and harvesting campaigns taking into account the budget facility (KZT60 mlrd.) totalled to KZT101.2 mlrd. According to the experts’ data, National Holding ‘KazAgro’ financed the production of 50% of wheat in Kazakhstan. Taking into consideration the grown and harvested yield at the total area of 6.5 mln.ha, each second ton of strategic product was produced for the account of KazAgro. At the meeting with the representatives of the banks Holding ‘KazAgro’ presented its mechanism of activities and financing of the grain producers’ associations and suggested the second-tier banks to actively participate in forming the new client market - agricultural cooperatives.
Let us recall that in 2015 the National Holding implemented the pilot project on integration of the agricultural entities based on the cooperation. The KazAgro’s initiative inspired over 100 small and medium farms, which before the last sowing campaign integrated within three regional cooperatives - in North-Kazakhstan, Kostanaiskaya and Akmolinskaya oblasts. The Project was implemented with the participation of the second-tier banks and, according to them, had succeeded. As the KazAgro’s representatives noticed at the meeting, the state is interested in development of the agricultural cooperation. Since 2016, a new law eliminating the barriers and promoting the cooperation has come into force. As they said at the meeting, the participation in the cooperation development at the stage of their establishment allows the active second-tier banks to take the leading positions at the new market in future.
Under the meeting’s results the banks showed interest in the initiatives and proposals by the National Holding. Before start of the active phase of the sowing campaign Holding ‘KazAgro’ is going to hold the visiting meetings in the regions, at which the representatives of the development institution will tell the farmers about the current programs of financing of the spring field campaign and share the experience of establishing the regional grain cooperatives. The top managers of the regional branches of the second-tier banks will take part in the work of these meetings.
National Managing Holding ‘KazAgro’ JSC implements the governmental policy on development of the agricultural sector of Kazakhstan by ensuring the effective management of the investment assets of the companies within its structure. The Holding consists of National Company ‘Food Contract Corporation’ JSC, ‘KazAgroProduct’ JSC, ‘KazAgroFinance’ JSC, ‘Agrarian Credit Corporation’ JSC, ‘Fund For Financial Support of Agriculture’ JSC, ‘KazAgroGarant’ JSC and ‘KazAgroMarketing’ JSC.
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