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EBRD, TCO Launch New Program to Support SMEs

Series of business courses and seminars in various areas

Wednesday 7 October 2015, by Catherine BISSON-SERIAN

ALMATY (EBRD press service) — In the framework of Aktau Declaration: Synergies and localization forum held in the city of Almaty, European Bank for Reconstruction and Development (EBRD) and Tengizchevroil (TCO) have signed an agreement to support small and medium-sized businesses in Kazakhstan.

TCO has allocated €458,000 for the program which will be implemented by the EBRD. The first two-year period of the program (2015-2017) aims to promote economic growth by increasing the productivity and efficiency of SMEs in all regions of Kazakhstan. The program aims to encourage entrepreneurship and allow prospective companies to become more competitive and enter new markets.

The project may involve both current and potential partners and suppliers of the TCO and other companies counting to collaborate with the TCO. The objective of the program is to provide access to know-how and finance, strengthening of business ties.

The program provides a series of business courses and seminars in various areas such as strategy, marketing, human resource management, finance and accounting. To date the EBRD Group to support SMEs has assisted more than 1,200 small and medium-sized businesses in Kazakhstan.

The Government of the Republic of Kazakhstan is a major donor along with the Government of the United States, BG Kazakhstan and the EBRD Shareholder Special Fund.

As of January 1, 2014, there were 1,542 thousand SMEs registered in the Republic of Kazakhstan. Of the total number of registered SMEs, 56.8% are active, i.e. they carry out ongoing activity and submit their reports to statistics agencies. Therefore, 671 thousand SMEs are not active. Same as in previous years, the main reasons include economic factors (for example: outage periods due to running at loss, seasonal nature of operation in certain sectors of industry) and some other operational factors (e.g. absence of operations due to recent registration). Lack of professional and management skills as well as limited market linkages are among key obstacles the Kazakhstan’s private sector is facing today.

Sole proprietorship, as the most popular registration form, prevails in the city of Almaty (16.1% of the total number of SPs) and the South Kazakhstan region (10.2%).

The most favourable conditions for development of farms have been established in the South Kazakhstan and Almaty regions where there are over 63% of the total national farms.

Number of SMEs with Foreign Participation

Information on the number of registered businesses with foreign participation or those owned by foreigners shows that the highest concentration of this type of SMEs is in Almaty and Astana. In these cities, the share of legal entities with foreign participation or owned by foreigners makes up 15.2% and 9.4% of the total number of SMEs correspondingly. Pavlodar (8.4%), Karaganda (7.4%) and Mangystau (6.8%) regions also belong to the group of five regions with the most favourable business climate for foreign investors.

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