Development strategy of “damu entrepreneurship development fund” JSC for 2014-2023 years

1. Development strategy of “damu entrepreneurship development fund” JSC for 2014-2023 years 2014

2. Environmental analysis • Анализ внешней среды Performance indexes of SME entities of Kazakhstan for2005-2013 years. • Since2005 through 2013 the number of registered SMB entities increased twice and made up to more than 1,5 million entities • Number of population occupied in SMB sector increased by 1,4 times and made to more than 2,6 million people in 2013. • SMB product output increased by 5,8 times for the period under consideration and made 9 020 milliard tenge per annum Source: Statistics Agency of RK(www.stat.gov.kz) Lending dynamics of economy and small businesses by banks • Restoration of growth of loans granted to SMB during 2011 – 2012 years is monitored. • Share of loans granted to SMB in second tier bank portfolio is decreasing annually • SMB sector in most extent is financed from own funds of entrepreneurs and only for a quarter through bank lending • Insufficient meeting of the entrepreneurs’ demand for financial resources Source: National Bank of RK(www.nationalbank.kz)

3. PEST analysis • PEST-анализ

4. Internal environment analysis • Анализ внутренней среды Results by major activity areas As of 01.05.2014. Performance of programs for specified investment of funds in second tier banks and lease financing Performance of “Business Road Map (BRM) 2020”: 1-3 areas Performance of “BRM 2020” program: 4th area Performance of entrepreneurial competence centers

5. Internal environment analysis • Анализ внутренней среды Fund financial state Profitability performance profile Balance sheet figures assets Liabilities Own capital • In 2011-2013 years stable net profit at the rate of 3,4 milliard tenge is ensured • Positive return on assets and equity capital • Equity capital has increased twice for the recent three years • On the whole the Fund has a high level of capital and this will enable to attract more debt finance instruments (borrows from the budget, international financial institutes, loans raised upon bonds) and based on this the Fund is capable of increasing size of assets

6. Benchmarking Correlation of credit volumes granted to SMB by programs of institutes for development as to the country SMB production output Correlation of credit volumes granted to SMB by programs of institutes for development as to Gross Domestic Product (GDP) of the country Share of covering SMB entities by support programs of institutes for development • Volumes of SMB credits granted to clients of the Fund in the ratio with GDP of the country are higher than in the countries - benchmarks • Volumes of SMB credits granted to clients of the Fund in the ratio with SMB production output are higher than in the countries - benchmarks • Share of covering SMB entities by programs of the Fund is assessed to be at the level of 7% of the total number of SMB entities in the country • Fund looks sufficiently competitive on the background of analogical organizations occupied in supporting SMB Source: World Bank, analytical magazine sectionThe Economist, work group review

7. SWOT-analysis

8. Mission, vision Challenges for the Fund MISSION: Mission of the Fund is to assist qualitative development of SMB in Kazakhstan through providing comprehensive support including wide range of financial instruments and programs for developing competencies VISION: Vision of the Fundby2023 – highly effective national institute realizing state policy for supporting and developing SMB Принципы финансирования и инвестиционной политики Отраслевая ориентация • Create effective institute for development integrated in National Management Holding “Baiterek” JSC Strategic areas of development • Ensure financial support for SMB entities • Develop competencies of SMB entities • Ensure breakeven level of operating and financial activity results • Increase effectiveness of managing financial resources • Increase transparency of operation and level of trust of people

9. Creating effective institute for development integrated to National Management Holding “Baiterek” JSC Tasks PERFORMANCE COEFFICIENT • Maintain Return On Assets (ROA) at break even level 1,09% in 2014, 1,2% in 2023. • Maintain Return On Equity(ROE) at break even level 2,07% in 2014, 2,5% in 2023. • Maintain cost-effectiveness at break even level 19,5% in 2014, 20,5% in 2023. • Maintain weighted average return - internal rate of return at a level not lower than6,0% till 2023. • Increase operating productivity from 37 592 thousand tengein 2014 to63 690 thousand tengein 2023. • Maintain indexNI margin at break even level 17,3% in 2014, 18,5% in 2023. • Maintain loan portfolio quality at the level 5,2% till 2023. • Increase local content share in procurements of the Fund including by goods from60% in 2014 to70% in 2023, works and services from90% in 2014 to96% in 2023. • 1 Ensure break even level of operational and financial performance results • 2 Increase effectiveness of managing financial resources • Maintain Debt / Capital index at a level not exceeding 3,5 till 2018. performance target Debt / Capitalfor 2023 will be identified in accordance with recommendations of rating agency • Maintain the Fund credit rating at a level not lower than sovereign rating during the whole period of implementing Development Strategy Increase transparency of business and level of trust by people • Increase share of SME entities which have been supported against the total number of actively operating SME entities at the market from 4,6% in 2014 to11,2% in 2023. • Maintain awareness extent of the Fund among people at a level not lower than 85% during the whole period of implementing Development Strategy • 3

10. Strategic areas of development Ensuring financial support for SMB entities Tasks PERFORMANCE COEFFICIENT • Increase volumes of assets against GDP from0,57% in 2014 to0,63% by 2018, 0,74% by 2023. • Increase the shareof credit portfolio from206 milliard tenge in 2014 to391 milliard tenge in 2018, 869 milliard tenge in2023. • Maintain the share of credit portfolio in total assets at the level 94% by 2023. • Increase volume of funds allocated for developing entrepreneurship by financial programsfrom 328 milliard tenge in2014 to507 milliard tenge in 2018, 583 milliard tenge in2023. • 1 Increase volumes of financial support for SMB • 2 Extend areas of cooperation and financing mechanisms / co-financing mechanisms of SMB jointly with financial institutes • Multiply co-financing for SMB entities on the part of second tier banks by credits granted under conditional financing program to 1:2 value in 2023. Attract extra funding at domestic and external markets to increase financing volumes for SMB • 3 • Increase the share of attracted funds for financing SMB entities out of extra-budgetary resources from 20% in 2014 to40% in 2023.

11. Strategic areas of development Ensuring financial support for SMB entities

12. Strategic areas of development Developing competencies of SMB entities Tasks PERFORMANCE COEFFICIENT • 1 Develop infrastructure of consulting services for entrepreneurs • Increase number of clients of entrepreneurship support centers from 33,2 thousand SMB entities in 2014 to188 thousand SMB entities in 2023. • 2 Training entrepreneurs and increasing competencies • Increase number of participants of training programs from 22,5 thousand people in 2014 to 25,5 thousand people in2023. • Increase share of training program participants opened their own business from10% in 2014 to25% by 2023. • Increase satisfaction degree among entrepreneurs by held training from value at least 80% in 2014 to value 85% by 2023. Introduce common informational platform for SMB and develop distance consulting methods • 3 • Increase number of clients received distance servicesfrom 36,5 thousand people in 2014 to 146 thousand people in 2023.

13. Strategic areas of development Developing competencies of SMB entities

14. Expected results * Index will be specified in accordance with recommendations of rating agency

15. Expected results

16. Thank you for your attention Headquarters 050004, Almaty city, Gogol St., 111 Tel.: +7 (727) 244-55-66, 244-55-77 Call center: 1408 Fax: +7 (727) 278 07 76 E-mail: info@fund.kz www.damu.kz www.business.gov.kz www.damu-komek.kz