How you can obtain the agricultural machinery on leasing? Advice by KazAgroFinance

1. What is the government support for carrying out the sowing and harvesting campaigns?

KazAgroFinance JSC renders support to the agrarians to solve one of the main challenges in agriculture – renewal of technical fleet for sowing, midseason and harvesting works, as well as other special equipment. As of today, over a half of all agricultural machines were imported to Kazakhstan with funding fr om KazAgroFinance. Only last year the Company financed the purchase of 3 000 units of machinery to total amount of over KZT50 mlrd.

2. Where to obtain and what terms are for obtaining the agricultural machinery for the spring field campaign?

In order to obtain more detailed information on opportunities for purchasing the machinery and equipment on leasing basis, you should apply to the Central Office of KazAgroFinance JSC or its branches across Kazakhstan.

The credit managers will consult you on all points of interest as to the current terms, tenors, interest rates, provide you with a list of documents required for obtaining the machinery/equipment on financial leasing.

It stands to mention that since the end of last year the financing rate for leasing of agricultural machinery and equipment has been reduced to 17.3% p.a. fr om 19% p.a., financing tenor is up to 10 years, advance payment is fr om 15% of machinery value. Moreover, there is a possibility to obtain a grace period for repayments up to 1 year.

At the same time, KazAgroFinance JSC proceeds with financing of machinery under the Program ‘Made in Belarus’, wh ere the Government of the Republic of Belarus reimburses for 2/3 of refinancing rate applicable at Kazakhstan at singing of a leasing contract. This Program does not exclude the possibility to obtain the Kazakhstani subsidies as well.

The Company also implements the special financing programs: “Express Leasing” supposing the accelerated consideration of applications, “Harvest” providing the opportunity to obtain the machinery before the first leasing payment, “Secondary Leasing” - leasing of used machinery.

More detailed information you may find at the Company’s corporate website www.kaf.kz.

3. Who may apply for leasing, what are the criteria to be complied with?

According to the Company’s Policy, financing is provided to the individuals and legal entities, being the agricultural sector entities, having the positive good standing, credit story, and skilled staff. The Project shall meet the statutory objectives, have a projected solvency, profitability and payback periods compatible with the financing tenors.

4. What are the differences between the current year terms of financing for purchase of machinery and the ones of previous years?

As compared to the terms of financing of 2016, this year the interest rate on the non-budgetary sources has been reduced to 17.3% p.a. from 19%p.a. We aim at the maximum reduction of load on the agricultural producers. In this regard, starting February 1, 2017 the interest rate has been reduced to 17.3% p.a. from 19%p.a on all leasing contracts made in 2016.

Moreover, in 2017 the activities on the business process optimization have been carried out, due to which: 1) the term for consideration of applications for leasing has been reduced by 8 business days and is 18 business days (without follow-ups); 2) the minimum set of documents to be provided by the Borrower at stage of making decision has been reduced to 9 (nine) including application and enquiry. The previous set consisted of 12 documents.

5.   How the machinery and equipment may be obtained by small farms and those, who apply for crediting for the first time?

The Company provides financing to all agricultural sector entities without restriction, if they comply with the specified criteria for applicants and provide the full set of documents.

6.   What shall the farmer do, if the collateral is not enough?

Upon leasing the machinery and equipment, the collateral is not required, unless the machinery and equipment require installation. In this case, the collateral will be a building (premise), wh ere the subject of leasing is to be installed, along with the land plot, wh ere the buildings (premises) are located.