What financing programmes are available to agribusiness

If you need money for sowing and harvesting

Ken Dala 2 is designed to finance spring field work and harvesting. The funds can be used for seeds, fuel and lubricants, fertilisers and plant protection products. For processing enterprises, the programme provides financing for the advance purchase of agricultural products from suppliers.

The rate for borrowers is 5% per annum (APR from 5%). The tranche term is up to 18 months, and the credit line term is up to 36 months. For crop farms, the amount of financing is calculated on the basis of the cost standard per hectare and the sown area.

The repayment schedule is tied to the agricultural cycle. Crop farms repay the principal in two instalments: 50% by 5 December and the remaining 50% by 5 March of the following year. Processing enterprises repay the amount at the end of the tranche term.

Participation requires at least three years of experience in agriculture. With less experience, a petition from the regional akimat is required. The borrower must also confirm that it has sown areas and meets the other requirements of the programme.

If processing enterprises and livestock complexes need working capital

Under the Agribusiness programme, concessional financing is available to replenish the working capital of enterprises that produce food and process agricultural products, as well as of livestock complexes.

The interest rate is 5% per annum (APR from 5%). The financing term for a single tranche is up to 12 months, and the credit line is valid for up to 36 months. The loan repayment schedule is set individually, taking into account the specifics of the borrower's activities and its business plan.

For livestock complexes, the following conditions apply to the use of borrowed funds:

Livestock fattening: at least 70% of the loan amount must be used to purchase animals for subsequent fattening.

Raising pedigree livestock of beef and dairy breeds: borrowed funds may be used to purchase feed, feed additives, fuel and lubricants, veterinary drugs, spare parts for feed preparation and feed distribution machinery and equipment, as well as to pay employees' wages.

The programme aims to provide agricultural enterprises with affordable working capital, support the continuity of production processes and create conditions for the further development of the processing industry and livestock farming.

If the project requires long-term lending, including the purchase of equipment or construction

Agribusiness 2.0 focuses on long-term investment. Unlike financing for seasonal expenses, it is intended for projects that require significant upfront investment and pay off over a longer period.

The list of areas includes livestock and crop farming, irrigation, intensive orchards, industrial greenhouses, storage and processing of agricultural products, and feed production. These include dairy farms, meat poultry farms, pedigree cattle breeding farms, feedlots, vegetable, fruit and grain storage facilities, and meat and oilseed processing plants.

The rate for direct borrowers is 12.6% per annum (APR from 12.6%). The maximum amount is 15 billion tenge. Loans are granted for up to 15 years for investment purposes and for up to 4 years to replenish working capital. The borrower must provide its own contribution to the project and confirm the project's economics, its payback, the availability of raw materials and sales markets, and the readiness of suppliers and equipment.

If your farm is developing pedigree livestock breeding

The Igilik and Bereke areas are intended for purchasing pedigree livestock. Here, the choice depends primarily on the size of the farm.

Igilik is designed for farms with 100 to 499 head of cattle or 500 to 999 head of small ruminants. In addition to cattle and small ruminants, the programme provides for the purchase of pedigree horses, camels, pigs, bees and marals.

Bereke is intended for farms with 500 or more head of cattle or 1,000 or more head of small ruminants. It also requires at least two years of experience in agriculture.

The rate under both areas is 6% per annum (APR from 6%). The maximum amount is 5 billion tenge, and the term is up to 7 years. The grace period for repayment of principal and interest can be up to three years.

There is one important point: these programmes are intended specifically for pedigree livestock. The purchase of commercial livestock is not financed.

Purchased breeding females must be used for their intended purpose for at least four years.

What to compare before applying

For an agricultural producer, choosing a programme starts not with the rate but with answers to a few questions: what the money is needed for, when revenue will come in, and what funds will be used to repay the loan.

If financing is needed for a single production cycle, it makes sense to look first at programmes with a repayment schedule tied to seasonality. If the loan is for machinery or construction, the loan term and the size of the annual payment become key. For large investment projects, what matters is the payback period and the ability to align the loan schedule with the project reaching its design capacity.

Requirements for the borrower should also be considered separately. Collateral, proven work experience, own funds, sown areas, sales markets and the necessary documents may matter just as much as the rate.

Current terms, borrower requirements and the list of required documents are published on the website of JSC Agrarian Credit Corporation, www.agrocredit.kz.