The Damu Entrepreneurship Development Fund announced its readiness to cut lending rates for businesses to 8.5 percent during the current year. This statement was made by the Chairman of the Board of the fund Kanysh Tuleushin at a recent forum for Kazakh entrepreneurs.
“If the average rate for the final borrower was about 14 percent in the past year, then the new measure would definitely mean a reduction of the real rate of return for us. However, we want to stress that the Damu Fund is not striving for profitability, so we want to provide loans in all regions of the country for the total amount of 24 billion tenge (US$73 million) with the final rate not exceeding 8.5 percent for a period of 5-7 years,” said Tuleushin at the forum.
According to the speaker, the Damu Fund also wants to reduce the time for consideration in second-tier banks, as now this procedure can last up to four months.
“We decided to follow the experience of the European Bank for Reconstruction and Development (EBRD), as we have trained credit officers in the banks and now the average time to review small loans from 20 to 30 million tenge (US$61,000 to US$91,000) doesn’t exceed seven days. To date, we have 50 projects approved with no default and we believe that the same experience should be implemented in all banks of all regions of the country,” Tuleushin concluded.