2024.03.01
On February 19, the Japan International Cooperation Agency (JICA) signed a loan agreement with the Limited Liability Company «Microfinance Organization «KMF» (hereafter KMF) in the Republic of Kazakhstan for Private Sector Investment Finance of up to US$50 million, and held a signing ceremony for the loan in Almaty on February 29. The funds from this loan will be used to finance micro-, small and medium-sized enterprises (MSMEs), including women-owned businesses. The loan is co-financed with the European Bank for Reconstruction and Development (EBRD), which has signed an agreement for funds of up to US$35 million, and is applied through the “Facility for Accelerating Financial Inclusion: FAFI” (*).
MSMEs play a crucial role in Kazakhstan's economy, accounting for about 34% of GDP and 44% of employment. However, the amount of MSMEs with access to bank loans in the country remains low, at only 12% for small enterprises and 28% for medium enterprises. In addition, women have particularly low access to finance, resulting in only 24% of MSMEs being female-owned.
With the promotion of MSMEs, including women-owned businesses, being critical to the further development of Kazakhstan's economy, improving their access to finance is an urgent issue.
Signing ceremony (KMF, EBRD, Embassy of Japan, and JICA)
CEO of KMF and JICA (right)
This project aims to contribute to the promotion of MSMEs and sustainable economic development in Kazakhstan by improving access to finance for the country’s MSMEs, including women-owned businesses, through KMF, thereby also contributing to the achievement of SDGs Goals 5 (Gender equality), 8 (Decent work and economic growth), and 17 (Partnerships for the goals).
(*) Facility for Accelerating Financial Inclusion: FAFI
This is a debt facility of up to US$1.5 billion for local financial institutions in developing countries that are engaged in projects that contribute to improving access to finance for (1) MSMEs, (2) low-income groups, or (3) women. This facility was established in light of Prime Minister Kishida's statement on May 20, 2023 at the G7 (Group of Seven) Hiroshima Summit—at the Partnership for Global Infrastructure and Investment (PGII) side event—that the G7 would support the sustainable development of partner countries through public and private infrastructure investment, as part of Japan’s contribution.
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