Kazakhstan’s Damu Entrepreneurship Development Fund recently entered into agreements with Islamic banks in Kazakhstan to support small and medium-sized enterprises (SMEs), the Astana Times reported on Jan. 25, citing a press release from the Damu Fund.
The agreements included a Kazakh tenge (KZT) agreement for EUR 10 billion (EUR 19.5 million) with Al Hilal Bank and a KZT 3 billion agreement with the Kazakh Ijara company on the further on-lending of small loans and medium-sized enterprises (SMEs) on preferential terms. The Damu Fund began assisting SMEs through the Islamic Finance program in April 2020 to support entrepreneurship by relying on the Murabaha Contract, which completes transactions for the sale of goods in installments, and the Ijara Contract, an analogue of a traditional rental agreement. Islamic finance implies special laws based on Sharia law that adhere to Islamic ethical principles.
“With the support of the Damu Fund, a significant number of our clients were able to get the funding they needed during this difficult time. This enabled them not only to overcome the crisis and save jobs, but also to expand their business and start new projects and generally contribute to the development of the regions in Kazakhstan, ”said Islamic Bank Chairman Al Hilal Yeltay Mukhamedzhanov.
“For many customers, small and medium-sized companies, the support of the state through the Damu Fund in the form of a partial subsidization of the yield was an urgent necessity. This support was not only substantial, but also very timely, ”said Yusuf Karshi, CEO of the Kazakh Ijara Company.