Small Business Lending in Kazakhstan

Essay by dima4 May 2005

download word file, 15 pages 5.0

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I. Introduction.

A. Reasons for undertaking research.

At the times of Soviet Union, there wasn't not only small or middle business, there was not any business at all, everything was public and there was no owners; so all countries of ex-Soviet Union have to develop their small enterprises intensively. For Kazakhstan, it was very difficult, mainly because Kazakhstan had more mineral industry and a little of agriculture, for the most part - grain. Processing industry was very weak. When USSR broke up and young Kazakhstan had to care about itself, enterprises needed huge amounts of money to buy necessary equipment, employ qualified workers to work in mineral industry and to develop processing industry, which demand, by the way, more expenses. However, firstly, government and banks did not have enough money to give credits to the enterprises and secondly, it was much easier to create monopoly. Thus, our system of supporting small business was not correct from the very beginning.

But still, 10 years later when it seems that Kazakhstan had grown roots and almost everything going rather well, our system of supporting small business in a bad condition (see Appendix 1).

There are several reasons why our small business develops very slowly. Firstly, there was not any optimal government strategy it support small business. Government did not reveal the appropriate branch and regional priorities for small business. Secondly, another problem is corruption. As we know, officials can build huge barriers before entrepreneurs, for example, different checks, problems with registration, and others. Thirdly, a high taxes on enterprises.

Small enterprises pay more taxes than big ones. This system of taxation should be more fair, because for small enterprises there is no stimulus not to develop, but even to conduct their own business. Lastly, in our country there is no appropriate lending...



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