Kazakhstan’s Damu Entrepreneurship Development Fund recently concluded agreements with Islamic banks in Kazakhstan to support small and medium-sized enterprises (SMEs), Astana Times reported on January 25, citing a Damu Fund press release. 

The agreements included a Kazakhstani tenge (KZT) 10bn (€19.5mn) agreement with the Al Hilal Bank and a KZT3bn deal with the Kazakhstan Ijara Company for further on-lending to small and medium-sized businesses (SMEs) on preferential terms. The Damu Fund started supporting SMEs via the Islamic Finance programme in April 2020 to support entrepreneurship by relying on the murabaha contract, which concludes transactions on goods’ sales in installments, and ijara contract, an analogue for a traditional lease agreement. Islamic finance implies Sharia Law-based special legislation that adheres to Islamic ethical principles.

“With the support of the Damu Fund, a significant number of our clients were able to receive the financing they needed in this difficult time, which allowed them not only to overcome the crisis and save jobs, but also to expand business, launch new projects, and generally contribute to the regions’ development in Kazakhstan,” said the board chairman of Islamic Bank Al Hilal Yeltay Mukhamedzhanov. 

“For many clients, small and medium-sized businesses, the support of the state through the Damu Fund in the form of partial subsidisation of the rate of return was an urgent necessity. This support was not simply substantial, but also very timely,” said Yusuf Karshi, CEO of the Kazakhstan Ijara Company.