The Ministry of Agriculture has made changes to the rules for subsidizing interest rates when lending to agricultural entities. The amendments will improve conditions for farmers whose loan agreements are on the waiting list, the department’s press service reported.
According to the rules, farmers can submit a proposal to include their loan agreements in the subsidy program within four years from the date of receipt of the loan. But since farmers did not immediately submit proposals, there was previously a risk that by the time additional budget funds arrived, short-term loan agreements could no longer be valid.
“The rules have been amended to provide that subsidies will be paid, including for proposals on the waiting list, for which the loan agreement has expired at the time of concluding the subsidy agreement. This will protect the rights of agricultural entities when participating in the subsidy program,” explained the Ministry of Agriculture.
In addition, changes are being made to link the nominal rate for calculating subsidies to the base rate of the National Bank of the Republic of Kazakhstan for projects financed under the mechanism of lending and financial leasing of priority projects. For such projects, subsidies will be provided no more than the nominal interest rate, calculated as the total expression of the base rate of the National Bank plus 4.5% per annum in tenge. Of this, 13.25% is paid by the state, and the difference is paid by the borrower.
The reporting form and list of goods for lending and financial leasing for priority projects in the production or processing of agricultural products have also been updated.
The new edition of the subsidy rules will come into force on December 10, 2023.
According to the Ministry of Agriculture, over the past three years, under this program, more than 44,700 agricultural entities received subsidies totaling 167 billion tenge. In 2023, about 81.3 billion tenge are provided for subsidizing interest rates in local budgets.