The Ministry of Agriculture expands farmers' access to the program of the subsidization of interest rates

The Ministry of Agriculture has reported on amendments to the Rules for subsidizing interest rates in lending. Thus, subsidies are to be granted to agricultural entities operating solely in accordance with the approved list of goods for priority projects in the production or processing of agricultural products, the World of NAN reports.

This innovation will allow to eliminate the receipt of subsidies by fly-by-night companies, pseudo-enterprises and subjects whose activities do not meet the general classifier of economic activities in the production or processing of agricultural products.

In addition, to increase the transparency of subsidies and to prevent misuse of budget funds the requirements for financial institutions and borrowers in the implementation of the mechanism of subsidies have been strengthened. According to the new edition of the Rules, the financial institution ensures verification of compliance with the terms of the loan agreement by the recipient of subsidies, including the full development and intended use of credit funds, the borrower, in turn, provides the financial institution with relevant information.

The new edition of the Rules also contains the norms aimed at providing access to subsidizing the subjects of AIC which concluded loan agreements before the increase of the basic rate of the National Bank of the Republic of Kazakhstan in 2022, and also the mechanism of subsidizing is saved considering the size of the basic rate. These amendments allow access to subsidies, including farmers who are participants in the "Economy of Simple Things" program.

Another important change is the inclusion of the opportunity to participate in the program for subsidizing interest rates on refinanced loans, which will give farmers the opportunity to switch from one financial institution with less attractive lending terms to another - with more flexible financing terms, while maintaining access to state support in the form of subsidized interest rates.

Also with the entry into force of the new edition of the Rules access to subsidies will be given to agricultural subjects who want to participate in the subsidy program again, and whose contracts are valid for over 4 years and more before submitting an offer for repeated participation. This will allow the farmers who were excluded from the subsidy program due to their financial difficulties to restore their participation in the program regardless of the date of conclusion of the loan agreement.

It should be noted that the Rules provide for the possibility to change the details of the subsidy agreement in case of relevant changes in the loan agreement due to the transfer of debt from members of the agricultural cooperative to the agricultural cooperative, in which these participants are members, when the debt under the loan agreements of an agricultural cooperative is transferred to its members, when the debt under the loan agreements of a member to another member is transferred, and also when data specified in the notice on starting operations in the agricultural cooperative are changed.

"All this will increase farmers' access to credit funds, reduce the credit burden and ensure targeted and efficient use of budget funds," the Ministry of Agriculture noted.

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