Guarantee

A guarantee is a form of security for contracts/agreements in which the bank guarantees the fulfillment of the client’s obligations to a third party.

The purpose of the guarantee

As part of the implementation of the Concept for the development of the financial sector of the Republic of Kazakhstan until 2030, the instrument for guaranteeing “Development Bank of Kazakhstan” JSC has been expanded to ensure access to credit resources of banks for medium-sized businesses when financing priority investment projects

The target audience

medium-sized businesses implementing investment projects (including project financing) aimed at creating new and modernizing existing production facilities using credit funds from second-tier banks, as well as funds from other financial institutions.

DBK has developed the following guarantee mechanisms:

The current mechanism for providing DBK guarantees on market conditions

Minimum guarantee amount:

when financing an investment project – 7 billion tenge
when financing an investment project in the field of food and beverage production – 3 billion tenge
when financing an export operation – 1 billion tenge

Guarantee period:

for an investment project – no more than 20 years
for export operations – no more than 3 years, but not more than the term of the loan agreement

The source of payment for the risk commission when providing a guarantee is the borrower’s own funds

Guarantee amount:

Up to 100% of the loan amount

Purpose:

Investments and replenishment of working capital

In accordance with the Rules for partial guarantee of loans from private business entities, approved by the Decree of the Government of the Republic of Kazakhstan dated July 2, 2024 No. 528, it is planned to introduce two additional guarantee mechanisms:

a mechanism for providing guarantees to “Development Bank of Kazakhstan” JSC (DBK) to business entities with subsidized risk fees;
a mechanism for providing DBK guarantees while simultaneously providing preferential funding to second-tier banks.

At the moment, these tools have not been put into effect.

Investment projects and export operations in the following industries are not subject to guarantee:

production of weapons and ammunition
production, distillation, rectification and mixing of alcoholic beverages
tobacco production
production of goods containing narcotic and psychotropic substances
wholesale and retail trade
car and motorcycle repair
art, entertainment and recreation, with the exception of multifunctional tourist complexes
exploration stage