According to the figures, during the specified period, banks issued 13.1 trillion tenge in new loans to businesses, which is 21% or 2.3 trillion tenge more than in the same period of 2023. Notably, 97% of these new loans to businesses were provided by second-tier banks.
When examining the types of borrowers, there has been a rapid increase in loans to large businesses (+24%) due to a gradual decrease in the cost of borrowed resources for them (-100 b.p.) and higher average application sizes (rising to 10.1 billion tenge from 7.3 billion tenge at the beginning of the year), the implementation of investment projects, and the deferred demand from 2023, alongside a positive trend in the number of loan applications and a higher approval rate.
In terms of economic sectors, the entire increase in large business loans is concentrated in two sectors—trade (+666 billion tenge) and industry (+514 billion tenge)—against the backdrop of their positive contributions to GDP (trade grew by 6.3% over the first nine months of 2024, while industry grew by 3.0%) and their higher shares in the economy (36% and 27%, respectively).
The acceleration in the issuance of new loans in the small and medium-sized business segment was lower (21% and 16%, respectively) due to mixed changes in the cost of resources (decreasing by 20 b.p. for medium businesses but increasing by 217 b.p. for small ones), a decline in the number of loan applications (due to the exhaustion of limits under state programs and public procurement), worsening financial conditions, and a lower approval rate.
According to the statistical analysis by the National Bank of the Republic of Kazakhstan, as of the end of January-September 2024, the share of stable enterprises among small businesses fell to 16.2% (down from 19.5% at the beginning of the year), while among medium-sized businesses it dropped to 14.9% (down from 17.4%).
The dynamics of demand for loans from small businesses continues to rely on funding from government programs, and the ultimate cost of their loans can significantly decrease due to subsidies and guarantees from the Damu Entrepreneurship Development Fund as collateral.
Given the significant share of small businesses in the issuance of new loans (43%), the ultimate cost of credit for businesses could be noticeably lower than statistical indicators, thanks to available preferential subsidies and guarantees.
Meanwhile, the sharp rise in the Consumer Price Index (from 0.4% in September to 0.9% in October), the high volatility of its changes (0.4-1.1% this year), a substantial increase in budget expenditures, and a significant rise in prices for regulated services, along with heightened inflation expectations (up to 8.4% from 8.1% in October) and a depreciation of the tenge (by 9.7% since the beginning of the year), will seriously hinder the normalization of monetary conditions in the country.
Nevertheless, an increase in demand for business loans is expected in the fourth quarter due to a surge in economic activity, the implementation of investment projects, the resumption of financing under state programs in certain regions, attracting financing and guarantees from public sector entities, as well as the launch of new products for businesses. Significant changes in lending conditions are not anticipated.
Double-digit growth in lending has continued across all categories of businesses (small, medium, large) and almost all sectors of the economy (the only exception being construction, which recorded a decline of 8.6%). This occurred against a backdrop of improved loan conditions, the launch of new products (secured and unsecured scoring products for businesses), and active penetration of lending among entrepreneurs (the number of businesses with loans increased to 519.6 thousand from 444.1 thousand at the beginning of the year), as well as regulatory measures to stimulate business lending.
The primary increase in loans to businesses is attributed to loans for replenishing working capital (68% of all loans issued to businesses) due to the impracticality of taking long-term loans and the dominance of the trade sector in the economy (36%).
A higher preference for short-term loans is observed among large (87% of new loans for a term of up to 1 year) and medium-sized (77% of new loans for a term of up to 1 year) businesses, which negatively impacts the loan portfolio for businesses (increasing by 7.6% over the first nine months of 2024) and does not contribute to the structural transformation of the economy.
The transition to long-term financing could be ensured by both stabilizing inflation and normalizing monetary conditions, as well as measures to develop guarantee mechanisms, syndicated lending, expanding the mechanism for investing the National Pension Fund's assets in bank bonds, and granting enterprises the right to deduct from their taxable base part of the expenses for repaying interest on loans for purchasing fixed assets.