ADBI Working Paper 904
Y. Dosmagambet et al.
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1. INTRODUCTION
The global financial crisis of 2008–2009, and the accompanying sharp decline in oil
prices, significantly influenced many of the oil-exporting countries.
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Exports and
government revenues have fallen considerably in
resource-based economies, adversely
affecting the GDP growth. In addition, mortgage prices have hit the banking system hard,
and the growth of loans to the private sector has significantly deteriorated. Since the
financial system of some oil-exporting countries has weakened, governments have had
to apply interventionist policies in the domestic financial sector, such
as credit
guarantees, liquidity support, capital injections, or equity purchases
(via government-owned vehicles such as sovereign wealth funds (SWFs). Particularly,
banks that lent heavily in the mortgage sector have suffered losses following the collapse
of these asset prices in the stock market (Edey 2009).
Bank loans to small and medium-sized enterprises vary across regions, and there is a
disproportionate distribution of bank loans within the regions. For instance, the share of
bank loans extended to SMEs accounted for 35% of the total bank loans in
North
Kazakhstan province and 0% in Turkistan (previously known as South Kazakhstan)
province as of August 2018.
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The maximum share of bank loans extended to SMEs in
the total is observable in
northern regions of Kazakhstan, such as North Kazakhstan
(35%), Akmola (31%), and Kostanai (14%). Indeed, only 19% of SMEs had a bank loan
or held a credit line in 2014, a decline from around 30% in 2008–09, a
decrease that is
partly a result of the turmoil that the financial sector has experienced in recent years.
In addition, the share of bank loans for asset purchases declined from 17.7% to 8.8%
from 2008 to 2015, while the share of enterprises reporting that they had demanded
a loan but banks had discouraged them from applying increased from less than
half to
around 60%. Banks grant two-thirds of their total loans in Astana and Almaty. Enterprises
located in the other regions experience particularly tight credit constraints. Banks reject
a large proportion of the loan requests from SMEs, which could be due
to the high collateral requirements. The OECD’s
