"Agrarian Credit Corporation" JSC (hereinafter – the Corporation) informs that the international rating agency Moody's Investors Service has maintained its current BA1 rating. The changes affected the forecast from "Stable" to "Negative".

The forecast of Moody's Investors Service was affected by the following factors: rapid growth of the portfolio, an increase in the share of impaired loans in the current loan portfolio.

Today, the Corporation is a leading development institution that provides credit to the agro-industrial sector. Due to the low interest of second-tier banks in lending to agribusiness, the Corporation, as an operator, implements a number of government programs to Finance the industry with affordable loans. Thus, the growth of the portfolio on 01.01.2020 compared to 01.01.2019 amounted to 110 billion tenge, while the share of state programs is 90%.

Since 2017, the Corporation has been implementing various investment projects. In order to import substitution and food security of the country, finances were directed to the construction of greenhouses, gardens, meat processing plants, feedlots, the development of livestock breeding, oil processing, dairy farms, poultry farms, etc. Such projects until the moment of commissioning and reaching production capacity are recorded in the Corporation's portfolio as “impaired loans”. This, in turn, affects the financial indicators.

Supporting micro-business in the countryside, the Corporation finances credit partnerships that have brought together more than 21,000 small and medium-sized farmers. It should be noted that during the restructuring of one farmer due to force majeure circumstances (drought, flood, etc.), the entire portfolio of the credit partnership is subject to impairment in accordance with the requirements of IFRS. Unfortunately, the loan impairment does not take into account the specifics of the agricultural sector.

In accordance with its development strategy, the Corporation plans to continue active support to the agro-industrial sector with an annual increase in lending volumes.