Farmers in Kazakhstan to be able to insure against risks of default on loans

BAKU. KAZINFORM Farmers in Kazakhstan will be able to insure against the risks of default on the loan agreement with a decrease of the average regional yield, the press service of Agrarian Credit Corporation JSC (ACC) said in a message.

ACC in cooperation with the World Bank have developed and implemented a new product for insurance of loans for spring field and harvesting for the borrowers of ACC.

"The joint product presupposes the financing of projects aimed at carrying out spring field and harvesting operations, guaranteeing insurance payments under the insurance contract in the amount of up to 40 percent of the principal amount if the regional yield is lower than the insured level and the borrower fails to fulfill its obligations under the loan agreement. The implementation of a new insurance product allows to reduce the volume of collateral to 60 percent of the loan amount," the message said.

To date, ACC has financed three credit partnerships (CP) for the purpose of subsequent lending to five borrowers (CP participants) for spring field and harvesting operations worth 476 million tenge, Trend reports.

The amount of loans secured by an insurance policy as part of the introduction of a new insurance product amounted to 183 million tenge, which allowed farmers-participants CP to sow wheat area to 28,300 hectares.

($1 = 340 tenge on June 23)