December 15 2004, 12:18

World Bank supports agricultural development in Kazakhstan

World Bank has approved allocation of a $35 million credit for realisation of the second stage of Post-Privatisation Agriculture Support Project in Kazakhstan, Kazinform news agency informed with reference to the Bank's press-service.

The aim of the Project is provision of assistance to farmers and agricultural SME's in getting access to commercial financial services, thus stimulating general development of farming sector in the country and increasing the living standard of rural inhabitants.

A drop of agricultural production and increasing investment requirements have conditioned a growing demand for financial services in the farming sector, especially in the field of long-term crediting. Due to continued privatisation of farming enterprises an appearance of the new clientele, not always possessing a sufficient mortgage, the needs in innovative financial products and instruments have sharpened.

"Kazakhstan's banking sector is already playing an important role in agriculture, but its scale is mostly limited by large farms and enterprises", WB Country Manager for Kazakhstan Loup Brefort said. According to him, the key task of this project is encouragement of deeper and more extensive financial intermediation in agriculture for the benefit of small farming businesses, thus increasing the range of available resources for their development, improving their competitiveness and finally increasing the incomes of small agricultural producers.

The total worth of the Project is $96.1 million and it consists of several components. These are financial consultancy services for agricultural producers, agricultural risk management, price risk management, increase of the scales of financial services in rural areas, development of micro-financing.

Kazakhstan joined the World Bank in 1992. Since then the Bank's investments in the country have amounted to nearly $2 billion in 23 investment projects.