BUSINESS/FINANCE

Businessmen in Eastern Kazakhstan

Commercial Banks’ Credit Policy does not promote development of Small and Middle-Sized Businesses

Aidar AKHMETOV

UST-KAMENOGORSK, March 4

(THE GLOBE)

Today,14,387 small and middle-sized businesses are legally recognised and registered in Eastern Kazakhstan and the number of individual businessmen is approximately 99,000. In terms of production volume, businessmen from the Eastern Kazakhstan region come second (after that of Almaty ).

In 1999 small businesses were allotted 2 billion 632 million tenge in credit. However despite the large figure, according to specialists’ estimations, this amount is only moderate given the introduction of the tenge’s free-floating rate. According to the European Bank of Reconstruction and Development, by the volume of allotted credit and the simplicity of the credit portfolio, Ust-Kamenogorsk is second after Almaty.

However, representatives of the Ust-Kamenogorsk credit circles state that the current credit policy of second-level banks does like to promote active development of the production sector of the country’s economy, including the potential for small business. The main obstacles preventing businessmen from gaining credit are the high rates (often twice as much as the sum loaned) and short terms of the credit.

Small and middle-sized business of Eastern Kazakhstan faces one more problem. Large industrial ventures are concentrated in this region, hence the executive power’s mentality is against businessmen or smaller entrepreneurs; these larger ventures being considered priorities.

The problem of interrelation with the state supervising agencies is also obstructive with frequent checks serving little use, based on old Soviet instructions.

According to one businessman, this, often intolerable, situation for the entrepreneur makes many reconsider their objective, namely that of working in Kazakhstan, especially in light of the fact that Kazakhstan’s northern neighbour has created more favorable conditions for its entrepreneurs. This same businessman stressed that his view did not reflect a personal absence of patriotism or nationalism, as he himself is Kazakh, but that many other businessmen shared his point of view.


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