The Kazakhstan Small Business Program: Commercial Banks Entering Micro and Small Business Finance

This paper presents the case study of The Kazakhstan Small Business Program (KSBP). It states that KSBP is the second program in Kazakhstan to try to downscale commercial banks as a means of delivering micro and small enterprise (MSE) loans in transition countries.

The case study highlights the following:

• By February 2004, KSBP was established in all urban centers in Kazakhstan;
• At least 90 percent of KSBP clients never had access to formal bank loans, and 85 percent of the outstanding loans are micro-loans;
• KSBP has positively affected the institutional set up of the partner banks and their competitors as well.

It concludes that:

• KSBP owes its success to sound, professional institution building;
• It also had a favorable environment in which to thrive. Kazakhstan's macroeconomic situation was stable, and the Government showed a strong political commitment to developing the SME sector;
• To replicate KSBP's downscaling success in other countries, sound institution building needs to be paired with favorable political and economic conditions.