1. State support of small and medium business in Kazakhstan: current status and prospects May 2011, Astana

2. 2 Social importance of SME and global experience of State support for entrepreneurship SME in foreign countries The main sphere of employment Formation of “middle class” as a vital factor in social and political stability Every year at the expense of small businesses is 2/3 jobs In the United States in a small business with more than 53% of the total employed population In the EU in small businesses employ about 50% of the total employed population In Japan, small businesses accounted for 72% of the total employed population In Kazakhstan there are 2.5 mln. individuals in SME – 31 per cent of the employed population There is great scope for development of the sector Many countries have special structures and funds to support SMES (SBA (United States), PARP (Poland), OSEO (France), SBC (Korea), KOSGEB (Turkey), etc.) Fund “DAMU" actively works to build partnerships and learn from the experience of foreign state institutional support for SME

3. Comparison of the SME sector in Kazakhstan with other countries 3 In Kazakhstan there are lower rates of contribution of SMEs in GDP and employment The distinctive features of industrial structure of SMEs in Kazakhstan: smaller share of manufacturing industry and services 52% 47% 59% 32% 54% 56% 69% 81% 31% 98% 99% 93%93% 0% 25% 50% 75% 100% USAUnited KingdomPolandTurkeyKazakhstan Share in GDPShare in employment Share in the total number of enterprises

4. Conditions for doing business in Kazakhstan In the “Doing Business 2011» Kazakhstan headed the list of countries with most improved business conditions Among a Customs Union countries the most favourable conditions are in Kazakhstan (Belarus- 68, Russian Federation- 123) in 2008.In 2009In 2010In 2011 Ease of doing business ranking80647459 Registration of enterprises5778858547 Lending48436972 Protecting investors51535744 Taxation4449535339 International trade178180182181 Rating For "Doing Business“, World Bank Negative dynamics on individual positions illustrates the need for further work to improve conditions Data source: www.doingbusiness.orgwww.doingbusiness.org 4 «…We do collect in Kazakhstan not only more friendly attitude to business in terms of social payments, but also on a number of other positions, in particular, protection of property..» President of the Russian Union of Industrialists and Entrepreneurs A. Shokhin during the meeting with the Prime Minister of the RF V. Putin

5. 49,7 51,1 52,4 52,0 10,3 10,8 11,7 9,5 0 10 20 30 40 50 60 01.01.200801.01.200901.01.201001.01.2011 Lending of economy Lending of small business Dynamics of Bank lending Annual volumes of granted loans (bn. USD) Loan portfolio of the STB (bn. USD) Since 2007: Steadily declining annual volumes of lending practically not changing the size of the loan portfolio of STB Data source: National Bank of RK(www.nationalbank.kz)www.nationalbank.kz 5 66,1 40,6 28,0 26,0 12,8 8,7 5,2 4,7 0 10 20 30 40 50 60 70 2007200820092010 Lending of economy Lending of small business

6. Program Actual issue, million. $. Number of borrowers Created jobs Stabilization program- tranche 1 597,12 7913 064 Stabilization program - tranche 2 1 115,92 9964 382 Stabilization program – tranche 3 1 359,33 0093 930 «Damu-Regions» 330,21 3922 327 «Damu-Ondìrìs» 262,22144 834 Financing SMES in Zhanaozen city 1,01714 Women's enterprises 12,1442121 Lease financing for SME 6,9391 670 «Damu-Regions 2» 22,869370 SME projects dot funding program 6,71780 Total 3 714,210 98620 792 Results of programs of “Damu” on finacial support of entrepreneurs Distribution by region (million. USD) Over $ 3.7 billion was sent for financing over 10 ths. Borrowers Every 5 th dollar in lending of SMEs was provided by the government Effect of implemented programs: Supported liquidity of STBs Provided social stability, created and supported by more than 20 thousand. jobs 68% of funds aimed at financing projects in the regions, incl. 18% outside of regional centres By 01.04.2011, Detailed information on: www.gis.damu.kzwww.gis.damu.kz 6 79 94 101 120 123 126 138 172 198 229 239 254 276 351 390 805 Zhambyl Atyrau Qyzylorda Mangystau North Kazakhstan Almaty South Kazakhstan Akmola West Kazakhstan Pavlodar Kostanai Aktobe East Kazakhstan Astana Karaganda Almaty city

7. Interest rates on loans to STBs and the Fund's programs Interest rates stipulated placement Fund programme Despite lower interest rates, for most subjects, especially SMES, start-up business loans of STBs continues largely closed The main barriers for SMES to obtain bank credit: Dynamics of rates on loans small business banks Data source: National Bank of RK(www.nationalbank.kz)www.nationalbank.kz 7  lack of credit history  the absence of collateral  simplified accounting   poor credit analysis  high unit costs  increased lending risks 14,3% 15,7% 14,0% 13,3% 11% 12% 13% 14% 15% 16% 17% 2007200820092010 18,3% 14,2% 13,7% 12,2% 8,5% 16,5% 12,5% 12,6% 11,3% 8,0% 6% 9% 12% 15% 18% 21% 1 tranche2 trancheDamu- Regions 3 trancheDamu- Ondiris Effective rates Nominal rates

8. Program "Business roadmap 2020" Problems in implementing the programme: Duration of approval applications (processing of applications in multiple stages at different levels), including guarantee > low number of guarantee treaties 8 DirectionsApplications Approved applications Contracts 1 st direction –interest rate subsidizing331258147 1 st direction – loan guarantees50148 2 nd direction –interest rate subsidizing 3779460 3 rd direction- interest rate subsidizing453827 Aim – sustainable and balanced growth of regional entrepreneurship in non-primary sectors of the economy The results of the programme at 25.04.2011.: Since 2011, Fund “DAMU" was appointed Operator of 4-th direction “Enhancing entrepreneurial capabilities" within the framework of the Program “Business Roadmap -2020 " (training entrepreneurs, service support, internship abroad)

9. 1. Financial Support State support for SMEs Subsidizing of interest rates Provision of resources for banks, leasing companies and microfinance organizations 2. Non-financial support formation of infrastructure Information and analytical support Consulting, Education 4. Administrative control5. Fiscal adjustment 6. Providing access to physical infrastructure 3. Stimulating demand for SME production - active role of the “DAMU” The Foundation acts as an operator or agent programs - advisory role of the Fund “DAMU” “DAMU” Fund may enter into interagency working groups Improving the legislative framework Integration of SMEs with large business Development of a system of state orders Protection of Competition Measures of tariff and nontariff regulation State support for SMEs in Kazakhstan 9 Guaranteeing of credits Equity financing

10. Development of guarantee system 10 TODAY Step-by-step approval of single applications of entrepreneurs: 1.Assurance of compliance with sectoral priorities in accordance with state policy 2.Time-consuming assessment of applications 3.Small coverage of target audience TOMORROW «Pool» guaranteeing: 1.Bigger coverage of borrowers 2.Faster distribution of big volumes of funds among borrowers 3.Abidance of market rules in terms of selection of borrowers by banks 4.Higher efficiency of public-private partnership  Goal: Maximal coverage of loans with guarantees from the government 

11. Education Advisory- support Feedback Information support Fund “DAMU" programs to improve the competencies of entrepreneurs 11 Since 2009 Fund “DAMU" embarked on programs to improve the competencies of entrepreneurs Enterprise support centres Business Portal Call-Center Program "Business Advisor" Report on the SME sector Monthly magazine “My business. Kazakhstan» Geographic information system Roundtables and forums of SMEs of Kazakhstan Marketing researches Интеграция информационно-консультационной и финансовой поддержки позволяет достичь синергического эффекта, снизить транзакционные издержки и бизнес-риски МСБ, в т.ч. через повышение профессионализма и прозрачности заемщиков 1 этап: Пропаганда предпринимательства 2 этап: Формирование идеи, защита бизнес-плана 3 этап: Привлечение финансирования 4 этап: Ведение бизнеса Обучение, разъясни- тельная деятельность Консультации, услуги ЦПП Поручительства, гарантии Консультации, услуги ЦПП

12. Head Office 050004, Almaty, 111 Gogol Street, Теl.: 8 (727) 244-55-66, 244-55-77 Теl./fax: 8 (727) 244-83-41 E-mail: info@fund.kz Site Facility: http://www.fund-damu.kz Thank you for your attention! 12