Monocities Development Program

Information about the Monocities Development Program for 2011 – 2020 “Second Phase – Diversification of the Economy and Development of Small and Medium-sized Businesses to Ensure Optimum Employment Structure in Monocities.”

The Program was approved by the Decree of the Government of the Republic of Kazakhstan dated May 25, 2012 No. 683.

Residents of monocitites and settlements in the territory of their administrative subordination, willing and having the ability to start or expand their own business may participate in the second phase.

Within this phase the following types of state support are given:

  • Free training in the basics of entrepreneurship;
  • Provision of microloans.

These measures will be implemented through the employment centers in monocities.

Training in the basics of entrepreneurship.

In accordance with the law on public procurement, the Program Coordinator chooses a local organization to teach the basics of entrepreneurship and facilitate the creation of a business plan.

Free entrepreneurship training provides:

  • training in basics of entrepreneurship;
  • assistance in creation of a business plan;
  • consulting (maintenance) services in project administration.

Training in the basics of entrepreneurship is given directly in monocities.

Provision of microloans.

Microlending is an active measure to promote employment, aimed at the development of entrepreneurship in monocities.

1. Public budget loan from the Central Government Budget shall be given to the local executive body of the district for 5 years on the principles of recoverability, urgency and payment with an annual interest rate of 0.01%;

Loan term is no more than 5 years;

Development period is 5 years from the date of receipt by the Coordinator of the Public Budget Loan Program;

Purpose of the public budget loan is the organization or expansion of a business, working capital;

Loan shall not be provided for consumer purposes, repayment of previous loans, acquisition of Real estate, land or to pay rent;

Maximum loan amount shall not exceed 3,000,000 (three million) tenge;

Beneficial borrower, microloan institutions and/or loan societies may be granted a grace period on principal repayment for a period of not more than one-third the length of the loan term.

2. Local executive body of regional significance shall determine a regional organization.

3. Local Program Coordinator provides loan to the authorized regional organization and enters into a lending agreement with it.

For authorized regional organization:

  • having the status of financial agency, the annual interest rate on the loan shall be set at 0.01%;
  • for other entities annual interest rate on the loan shall be set at the current average weighted rate of return of government securities issued by the central authorized body on budget execution in the previous quarter as a result of operations in the organized secondary securities market on the relevant state equity securities.

4. Authorized regional organization selects microloan (microfinance) institutions in accordance with the criteria defined in the Rules of Lending to Microloan Institutions and Societies on a Competitive Basis in accordance with the Decree of the Government of the Republic of Kazakhstan dated July 18, 2011 No. 819 (hereinafter “the Rules”).

Authorized regional organization provides lending resources to microloan (microfinance) institutions under the conditions defined in the Rules.

Lending resources are available to credit organizations on terms of urgency, recoverability, payment, security and intended use.

The maximum annual effective interest rate on lending resources for the beneficial borrower shall be established by the authorized regional organization with the approval of the Regional Coordinating Council.

5. The provision of state support in the development of enterprise of the self-employed, unemployed and disadvantaged population shall be carried out without sectoral restrictions as follows:

  1. Those who wish to participate in the Program shall apply to the employment centers, where they can get advice on possible options for microloan under the Program. If candidates are willing to obtain loans through microfinance (microloan) institutions selected on a competitive basis, they shall submit an application and the following documents to the employment center:
    • copy of the identity document;
    • copy of a document confirming the registration at a permanent residence (address reference on living in monotown/area of the person);
    • copy of the work book (if any) or other document confirming employment status (for employed persons);
    • business proposal to organize or expand their own business.

      Persons planning to expand their own business and finance working capital should  submit the following additional documents provingsolvency (original of certificate from second-tier bank or its branch signed and sealed, where the person is serviced, proving the absence of arrears on all kinds of person’s obligations with a term of more than three months prior to the date of issuance of certificate, towards the bank or its branch (in case the person is a client of several second-tier banks or branches, as well as a foreign bank, this information shall be presented by each of these banks);
  2. Employment centers consider the submitted application and documents, form lists of candidates by the types of state support and a list of business proposals, and within 5 (five) working days of receipt of a complete set of documents they send:
    • lists of candidates and the list of business proposals for admission into the Program or refusal to the Local Program Coordinator;
    • applications and documents submitted by candidates, lists of candidates and the list of business proposals to microfinance (microloan) institutions or loan societies selected on a competitive basis;
  3. Within 10 (ten) calendar days from the date of receipt of the documents the following shall be submitted to the employment center:
    • by the Local Program Coordinator – report on the conformity of the proposed project to the priority development directions of entrepreneurship in the region and the decision on admission into the Program, or justified refusal;
    • by the microfinance (microloan) institution or loan society selected on a competitive basis – report on possible or impossible lending to candidates;
  4. After receipt of the above reports, decisions on admission into the Program, or justified refusals, should be sent in writing within three working days by the employment center to the candidates;

  5. Employment centers direct participants of the Program to the training organizations, which provide free training in the basics of entrepreneurship with a training period of one month and assistance in preparing a business plan.Thus, the persons previously trained in the basics of entrepreneurship within the Employment Program 2020, Employment Roadmap 2020 and Business Roadmap 2020 having certificates confirming the training, are eligible for microloan. The validity of the document confirming the training shall not exceed three years;

  6. Each participant of the Program shall develop a business plan and submit the application for a microloan to a microfinance (microloan) institution entitled to lend to Program participants;

  7. Microfinance (microloan) institution assesses the project, provides a conclusion and makes a decision on the possibility (or impossibility) of microlending.In the case of microlending through the loan society, participant of the Program shall develop a business plan and apply to loan society, which is involved in the competition for the selection of loan societies conducted by the authorized regional organization in accordance with the Rules.Within 5 (five) working days after the issue of microloans to the candidates, microfinance (microloan) institutions and loan societies applicants notify the Local Program Coordinator. By order of the Mayor of Karaganda Region dated December 03, 2013 No. 70/01, JSC “NC “SEC “Saryarka” was defined as an authorized regional organization responsible for the implementation of the second phase of the Monocities Development Program for 2012 - 2020 in terms of microlending to the self-employed, unemployed and disadvantaged population to start or expand their own business. During the period December 23 – 25, 2013 lending agreements with SI “Business and Industry Department” of Zhezkazgan, Shakhtinsk and Abay monotowns have been signed, and loan proceeds have been transferred to the account of SEC. As of December 25, 2014, loan proceeds have been disbursed in full 122.2 million tenge.