Scaling up state support: from 2026 second-tier banks to join lending for agricultural processing

The Government of Kazakhstan is preparing to expand financing mechanisms for enterprises engaged in agricultural processing. A key innovation will be the involvement of second-tier banks in lending to the sector starting from 2026. This was stated in Prime Minister Olzhas Bektenov’s response to a parliamentary inquiry from Senate deputies.

 

According to the government’s plans, state support measures will be extended next year to investment loans issued through commercial banks. At present, relevant government agencies are developing detailed criteria and conditions for the participation of second-tier banks in the program. This decision is intended to increase capital inflows into the sector and diversify funding sources.

 

The Prime Minister also reported on the current support mechanisms in place. Today, processing enterprises have access to concessional financing for working capital at an interest rate of 5% per annum.

 

The program covers a wide range of areas:

– processing of meat, milk, wool and oilseeds;

– feed production;

– manufacturing of cereals, pasta and confectionery products.

 

A key requirement for borrowers is support for the domestic market: raw materials must be purchased exclusively from domestic agricultural producers.

 

According to the Prime Minister, the concessional lending mechanism is adapted to the seasonal specifics of the agricultural sector. This allows enterprises to accumulate funds for one-time purchases of raw materials during the harvest period, ensuring uninterrupted utilization of processing capacities throughout the year.

 

The concessional working capital lending program has demonstrated strong demand. Since its launch in May 2025, financing has been provided to 158 enterprises for a total amount of KZT 83.3 billion.

 

In addition, agribusinesses have access to instruments of the Agrarian Credit Corporation under the “Agrobusiness 2.0” program. The terms are as follows:

– purposes: replenishment of working capital, modernization and expansion of production;

– amount: up to KZT 15 billion;

– interest rate: 12.6% per annum;

– tenor: up to 48 months for working capital.

 

For capital-intensive projects exceeding the limits of the Agrarian Credit Corporation, financing is available through the Development Bank of Kazakhstan. In particular, the bank supports projects related to deep grain processing. The Development Bank’s terms include an interest rate of 12.6% and long-term lending from 5 to 20 years, while requiring the borrower to contribute at least 20% of the project cost with its own funds.

 

Additional stability to the system is provided by the guarantee mechanism through the Damu Entrepreneurship Development Fund. If an entrepreneur lacks sufficient collateral, the fund is ready to guarantee up to 85% of the loan amount and also offer tax preferences.

 

In conclusion, the government notes that the established set of measures is aimed at moving away from a raw-material model, stimulating the production of goods with higher value added, and expanding the range o