Government considers real sector financing issues.

Prime Minister instructs to strengthen investor support and to involve banks in economic development, DKnews.kz reports.

The Government session chaired by the Prime Minister of the Republic of Kazakhstan Olzhas Bektenov considered the issues of financing the real sector of the economy.

At the beginning of the meeting, the new Minister of Industry and Construction Yerssaiyn Nagaspayev took the oath of office. Deputy Prime Minister - Minister of National Economy Serik Zhumangarin presented the main approaches to financing, and line ministers reported on measures in key sectors: transport, industry, agriculture, energy and water supply. Representatives of the financial block also made speeches.

Dynamic development of the economy is impossible without active financing of the real sector. Prime Minister Olzhas Bektenov noted that this today is hindered by a number of problems such as insufficient efficiency of government agencies in the development of investment projects, lack of long-term loans for business and competition between state financial institutions and second-tier banks. State development institutions mainly finance projects themselves, which reduces the interest of banks in lending to the real sector.

"Second-tier banks should play a key role in financing the real sector of the economy. This is what the Head of State spoke about at the enlarged meeting of the Government. This year the Government will take all necessary measures to ensure conditions for timely financing of projects in the real sector of the economy" Olzhas Bektenov

In order to address these issues it is planned to:

• to expand the use of the state guarantee;
• to create a Guarantee Fund for small and medium-sized businesses;
• additional capitalisation of Baiterek Holding;
• ensure a balance between state development institutions and second-tier banks.

The Prime Minister urged the government agencies and the banking sector to coordinated and efficient work. In this regard, Olzhas Bektenov instructed state bodies to provide full support to investors and control over the implementation of investment projects. Akimats should accelerate the introduction of necessary infrastructure for the implementation of investment projects and more actively involve the funds of local budgets. The Ministry of Finance should also ensure timely financing of priority projects.

Second-tier banks should be more actively involved in financing the real sector, working with industrial and infrastructure projects, not only in trade and consumer lending. In turn, the state will provide subsidising, guaranteeing and refinancing instruments. It is necessary to ensure a balance between state institutions and banks. State financial structures should not replace second-tier banks, but create conditions for their participation in financing. The work should also be aimed at the development of private investment instruments, including the issuance of corporate bonds and public-private partnership mechanisms. Ministries, akimats, quasi-public sector and banks need to mobilise all resources for qualitative and dynamic growth of the national economy.