"Fund for financial support of agriculture”

17 november 2020
2 min

For many years Kazakhstani farmers say that they do not have enough financial resources to fully carry out their activities, many even call it the main problem that impedes the development of the entire industry. Nevertheless, today not all agrarians, according to them, can get a loan, as they are often required to provide liquid collateral, which few are able to provide.

To understand this issue in more detail, we contacted the "Fund for Financial Support of Agriculture", which supports entrepreneurship and provides soft loans under government programs.

For reference: "Fund for Financial Support of Agriculture" was established in 1994 to finance entrepreneurs. The main objectives of the fund are to develop priority areas of the agro-industrial complex and increase employment in Kazakhstan.

The sole shareholder of the organization is the holding “KazAgro", that is, 100% state-owned.


Starting from 2017 the Fund implements the second direction of Program for development of productive employment and mass entrepreneurship "Enbek". Support for entrepreneurship under this program covers the areas of animal husbandry, crop production, processing, storage of agricultural products, as well as areas not related to the agro-industrial complex.

Loans are issued at the interest rate of 6% per annum, the effective rate does not exceed 6.7% per annum. For members of large and low-income families, the rate is 4%, while the effective rate is 4.7% per annum.

There is also a grace period (up to two years), during which the client can engage in business development without paying the main debt and remuneration.

In addition, the Fund finances projects for the development of animal husbandry under certain conditions. Loans for breeding cattle, sheep, camels and horses are issued in the amount of up to 30 million tenge for a period of 10 years. The remuneration rate is the same – 6% per annum, taking into account state subsidies, the effective rate is no more than 6.7% per annum.

The loan can be repaid quarterly or semi-annually, and the payment schedule is approved according to the type of business.

Any movable or immovable property, including those located in rural areas, is accepted as collateral. For livestock breeders, it is possible to pledge livestock purchased at the expense of credit funds, if it is breeding cattle. 

Thus, the farmer can provide only 25% of the deposit amount, the remaining 75% will be provided by the purchased animals.

How to get a loan?

If you are an unemployed / self-employed citizen or an individual entrepreneur, you need to register at the district employment center, where you will take a course on business basics under the “Bastau " project. Along with the received certificate, developed business plan and set of documents, you submit a loan application to the Fund.

If you are an individual entrepreneur who has been running own business for more than 3 years, a certificate of training completion is not required. It is only necessary to provide for the creation of one additional workplace in the business plan.

Since the Fund's activities are licensed by the national Bank, a number of requirements are imposed on borrowers. In particular, the applicant must have a favorable credit history, collateral, and no overdue debts to budget and financial organizations.

Simplification of credit procedures

According to the Fund, the issue of increasing the availability of credit resources for citizens is constantly in the focus of attention. Thus, work is underway to optimize and automate business processes, reduce the process of collecting documents for the borrower, and simplify the submission and consideration of applications.

At the initiative of the management of KazAgro holding, the automation of the lending process has been started. Thus, applications for loans under the Enbek program in the amount of up to 4 million tenge for the development of livestock are accepted online through the portal www.online.fagri.kz, but still in test mode in the Akmola and Almaty regions.

In addition, if previously the borrower had to provide 13 documents, now only an identity card, an electronic digital signature and title documents for the collateral are required. The decision to pre-approve the application is made from 15 minutes to 1 hour. The deadline for further consideration of the application has been reduced from 15 to 5 business days.

Insurance in agribusiness

In 2020, the Ministry of Agriculture introduced a new system of insurance in the agricultural sector, which is based on the principle of voluntariness. The Fund acts as an operator in this direction. This year, insurance products have been developed and implemented to protect against risks based on the soil moisture index – insurance of crops against drought or abnormal rains.

The new insurance system allows one to sign an insurance contract without leaving one's own home. In addition, agricultural producers engaged in crop production are reimbursed for half of the insurance costs at the expense of state subsidies. Farmers who insured their fields have already received their first payments.

All processes are carried out in the Agroinsurance information system on the platform www.qoldau.kz. State support in the form of subsidizing insurance premiums is aimed at stimulating agricultural producers, reducing risks and attracting investors to the industry.

Thus, in June of this year, 60 farms insured their fields against drought. Insurance premiums amounted to 199 million tenge, half of which was paid at the expense of state subsidies. As a result, 47 households received insurance payments totaling 491 million tenge.

In October, another insurance product was approved to reduce the risks of livestock breeders – cattle insurance. If earlier it was possible to insure cattle as property, now the list of risks is detailed: insurance covers diseases, accidents, death of livestock as a result of natural phenomena both on the territory of the farm itself and within a radius of 5 km around.


As is known, second-tier banks are reluctant to go into the agricultural sector, as such a system of guarantees has been developed to provide for the possibility of granting loans to agribusinesses who do not have sufficient collateral.

Thus, under the Enbek Program, guarantees are provided to farmers who apply for loans in micro-finance organizations or credit partnerships. If the borrower does not have enough collateral, the Fund's guarantee comes to the rescue.

In addition, a mechanism has been put in place to guarantee loans from second-tier banks. This system is available to farmers and entrepreneurs who are implementing or planning to implement investment projects using credit funds. According to the terms of the guarantee, the loan must not exceed 3 billion tenge, the annual interest rate-no more than 17%, the loan term-up to 10 years. The guarantee is provided for the implementation of investment projects in agriculture and food production.

Priority investment areas include dairy farms, poultry farms, intensive gardens, greenhouses, sugar beet cultivation, grain production, processing of vegetables and fruits, projects for the production of vegetable oil and fat products.

In general, the “Fund for financial support of agriculture " covers up to 50% of the loan amount with a guarantee. Thus, before the launch of priority investment projects, the guarantee amount reaches 85%, and after commissioning, the guarantee amount is reduced to 50%.

Some statistics

In 2020 (as of 13.11.2020), within the framework of the State program for the development of productive employment and mass entrepreneurship for 2017-2021 “Enbek”, more than 8.3 thousand micro-loans were issued to rural residents in the amount of 31.1 billion tenge, and more than 10.3 thousand villagers were provided with employment.

In general, the Fund has been implementing state employment programs since 2013. During this period, more than 63 thousand micro-loans worth 198 billion tenge were issued to rural residents.

With the help of loans from the Fund, many business facilities have been opened in the village, and more than 67 thousand villagers have been provided with employment. The Fund's loan portfolio includes many projects that started from scratch, but today have already become large farms or enterprises.