Program of subsidizing interest rates on loan and lease liabilities as per agro-industrial complex financial improvement strategy

Purpose of subsidies / funding:

• working capital financing, construction and acquisition of fixed assets;
• finance lease of technological equipment, agricultural machinery.

Financial recovery is performed

• under credit / creditor and lease obligations that incurred prior to January 1, 2014.

Term:

• extension of period of return of loan and lease liabilities of borrowers for not more than 9 (nine) years.

Maximum amount per one Borrower:

• In case the amount of credit / creditor / finance lease obligations of the borrower, subject to financial recovery, exceeds KZT 4,500,000 (four billion five hundred million), and there is more than one lender (financial institution), the second-tier banks will establish a committee of creditors for the integrated recovery of API entities and submit a comprehensive financial recovery plan. 

Priority directions:

• Annex 1

Interest rate:

• In case of subsidies: The interest rate shall be subsidized by reducing the interest rate under loan and lease obligations of borrower by seven per cent (7%) per annum in KZT and by five per cent (5%) in foreign currency
• In case of funding at the expense of a financial agent: Interest rate on the restructured / refinanced contracts of borrowers shall not exceed seven per cent (7%) per annum in KZT and five per cent (5%) in foreign currency under loan / lease obligations.

Loan currency:

KZT, foreign currency

Fees:

No fees and/or other payments are charged from the borrower for the participation in the financial restructuring, except for fees and/or other payments associated with changes in terms of lending/ finance lease initiated by the borrower.

Prohibitions:

Borrowers that undergo change of the legal form, liquidation or bankruptcy are not admitted, except for borrowers whose debt is being restructured and borrowers who undergo accelerated rehabilitation procedure or rehabilitation procedures. Borrowers that by decision of the commission for financial rehabilitation are deprived of subsiding, may not participate in financial recovery procedure again.

Special condition:

• Financial recovery is conditional on write-off by financial institutions of all accrued fines and penalties, accrued/ overdue interest is paid by installments under specific schedule (no capitalization in the principal debt) at the interest rate not exceeding 0.1% per annum, except in cases where the borrower has agreed to capitalization of overdue interest in principal debt.
• Terms of restructured / refinanced loan and finance lease contracts (interest rate, term of payment, deferment of the payment of principal debt and/or interest) may not be changed more than once a year by the decision of the financial recovery commission. In the case of a change (extension) of the term of restructured / refinanced loan and finance lease agreements, term of subsidy shall not be prolonged, and shall not allow the capitalization of interest in principal debt.