Business Road Map Program (2020-2025)

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Government-funded SME support program providing subsidized loans, loan guarantees, grants, and non-financial services to entrepreneurs in priority sectors and peripheral regions.
What are the main aims and objectives?

Kazakhstan's Business Road Map Program (2020-2025) represents a continuation and expansion of the original Business Road Map 2020 framework, aiming to ensure sustainable and balanced growth of regional entrepreneurship in non-commodity sectors while creating permanent employment opportunities. The program targets entrepreneurs in industry-based monotowns, small towns, and rural settlements, regions historically lacking access to financing and business support services. By prioritizing support for government-identified strategic industries including manufacturing, processing, transport and communications, and agriculture processing, the program concentrates limited resources on sectors with greatest potential for export expansion and non-oil economic growth. The regime addresses specific barriers constraining SME sector development in Kazakhstan: limited access to affordable financing (with commercial lending rates reaching 15-20% compared to program-subsidized rates of 7-7.1%), insufficient non-financial business support services, regional economic inequality concentrated in the capital and major urban centers, and persistent formal versus informal economy boundary. The program aims to increase SME contributions to GDP (targeting 35% by 2025, progressing toward 50% by 2050), enhance employment generation particularly in non-commodity sectors, improve tax revenues through business formalization, and support Kazakhstan's economic diversification objectives outlined in the Kazakhstan-2050 Strategy and National Plan of Measures.

How does the program work?

The Business Road Map 2020-2025 operates through integrated financial instruments and non-financial support services, coordinated across multiple government institutions and quasi-state development entities. 

Loan Subsidies: The program's primary financial mechanism provides interest rate subsidies on loans issued by commercial banks (second-tier banks). Working capital loans reach up to 360 million tenge (approximately USD 770,000), while investment loans accommodate up to 2.5 billion tenge (USD 5.4 million). Rather than providing direct government funding, the program reduces effective interest rates to approximately 7-7.1% compared to typical commercial rates of 15-20%, substantially improving financing accessibility for SMEs unable to access market-rate credit.​ 

Loan Guarantees: The program provides partial guarantee coverage protecting lenders against borrower default. Historically, guarantees reach up to 85% of loan amounts for microenterprises. By 2024, guarantee programs expanded to accommodate larger projects and broader business categories, with guarantee amounts reaching 178.9 billion tenge (USD 383 million) supporting 5,381 projects in first half of 2024 alone.​

Public Grants: Direct grants provide capital to establish new businesses, with grant amounts typically ranging up to 3 million tenge (USD 6,400), though specific eligibility criteria determine actual allocation amounts.​ 

Non-Financial Support Services: The program delivers business fundamentals training covering financial management, market analysis, and sales strategies through approximately 10,000 formal training participants annually. Beyond classroom training, the Atameken National Chamber of Entrepreneurs provides business development consulting, market strategy guidance, and operational optimization assistance to 166,000+ consultation recipients annually.​ 

Implementation Architecture: Damu Entrepreneurship Development Fund administers financial instruments and fund flows to participating commercial banks. The Ministry of National Economy coordinates policy implementation and strategic direction. Regional akimats (local government bodies) ensure geographic resource distribution and establish regional business support infrastructure including entrepreneurship centers and incubators.​ 

Eligibility Requirements: Small and medium-sized enterprises operating in priority sectors qualify for support. Companies must demonstrate investment commitment through personal financial participation (typically 15-50% of project costs), maintain separate accounting systems, and comply with employment targets requiring 10% workforce increase within two years for standard enterprises or 20% for priority sector companies.​ 

Operational Stage Progression: Companies progress through defined stages. Stage 1 (early-stage) provides idea validation and MVP development through training and mentoring with light financial support. Stage 2 (growth-stage) offers incubated companies comprehensive workspace access, advanced financial support, intensive coaching, expanded networking, and strategic advisory services.

What is the overall cost?

The Business Road Map 2020-2025 phase received a budget allocation of 421 billion tenge (approximately USD 903 million) for the entire five-year period, representing approximately 1.5 times the funding level of the previous 2015-2019 period. Annual budgets expanded substantially: by 2024, allocations reached approximately 300 billion tenge (USD 643 million) annually to support approximately 60,000 business projects annually.​ 

Between 2010-2019 (initial Business Road Map decade), the government allocated 282 billion tenge (USD 603 million). The 2015-2019 period specifically allocated 145.8 billion tenge (USD 312 million). By 2023-2024, annual allocations had expanded to 266 billion tenge (USD 570 million) in 2022 and 300 billion tenge (USD 643 million) by 2024, representing nearly 4-fold increase from 2018 levels of 72 billion tenge (USD 154 million).

How was it implemented?

The Business Road Map 2020-2025 emerged through deliberate legislative evolution extending from earlier Business Road Map 2020 framework approved in 2010.

Presidential Mandate and Government Approval: On November 6, 2019, Kazakhstan's government, chaired by Prime Minister Askar Mamin, formally reviewed and approved transition from Business Road Map 2020 to Business Road Map 2025. Minister of National Economy Ruslan Dalenov presented comprehensive results from 2010-2019 implementation, demonstrating program effectiveness and justifying expanded scope for 2025-2030. The decision reflected Presidential Address from October 2018 when President Nazarbayev explicitly directed government extension of Business Road Map program through 2025 with minimum 30 billion tenge annual allocation to create minimum 22,000 new permanent jobs within three years while generating 224 billion tenge in tax revenues and producing 3 trillion tenge of goods.​

Structural Enhancements: The 2025 program incorporated significant operational improvements from 2010-2019 lessons learned. Maximum working capital loan amounts increased from 60 million to 360 million tenge. Decision-making timelines accelerated through digital service optimization: subsidy and guarantee decisions reduced from 25 days to 5 days, and grant decisions compressed from 48 days to 16 days, with further reductions to 3 days implemented subsequently.​

Implementation Architecture: Program administration involves structured coordination among Ministry of National Economy (policy coordination), Damu Entrepreneurship Development Fund (financial instrument administration), Atameken National Chamber of Entrepreneurs (non-financial support provision), second-tier banks (credit intermediaries), regional akimats (local implementation), and Baiterek National Management Holding (institutional oversight). This multi-institutional coordination reflects recognition that effective SME support requires integrated policy across multiple dimensions.​

Phased Roll-Out (2020-2025): The program transitioned to 2025 phase with expanded eligibility criteria, increased funding allocations, and improved support mechanisms. By January 2024, government reorganized support through integration with "Economy of Simple Things" program and established differentiated support based on business technological complexity, with high-tech manufacturers receiving more favorable conditions.

What impact has been measured?

Employment Generation: The program preserved more than 342,000 jobs and created over 94,000 new permanent jobs through 2019. For 2025 program specifically, projections indicated creation of minimum 22,000 new jobs annually. By 2024, the program was supporting approximately 60,000 business projects annually.​

Financial Disbursement Scale: During 2015-2019, interest rate subsidies supported 11,904 projects with subsidized loan portfolios totaling 2.2 trillion tenge (USD 4.7 billion). Loan guarantees covered 4,302 projects worth 155 billion tenge (USD 332 million). By 2023, the program supported 12,000 projects with subsidized financing totaling approximately 1 trillion tenge (USD 2.1 billion) annually.​

Production and Economic Output: Program-supported enterprises generated goods and services valued at 15.5 trillion tenge (USD 33.2 billion) during 2010-2019. This production value demonstrates substantial SME sector contribution to national economic output.​

Tax Revenue Contribution: Between 2010-2019, more than 1 trillion tenge (USD 2.1 billion) in annual tax payments flowed from program-supported enterprises to government budgets, contributing substantially to revenue stabilization during periods of volatile commodity prices.​

Business Formalization: The program contributed to business formalization with registered SME numbers growing from approximately 1.9 million (2020) to over 2.26 million (2025), indicating both new venture creation and formalization of previously informal economic activity.

What lessons can be learned?
  • Persistent Urban Concentration Despite Peripheral Region Targeting: Despite explicit program targeting of monotowns, rural settlements, and peripheral regions, the largest numbers of program beneficiaries concentrate in Almaty, Astana, Shymkent, and Aktobe regions, with minimal project distribution in peripheral regions including Ulytau and Zhetisu. This indicates that peripheral region support mechanisms, while formally available, require infrastructure, skilled workforce, and institutional capacity not adequately developed through financing mechanisms alone.
  • SME Heterogeneity Conceals Unequal Support Distribution: Program statistics aggregate results across microenterprises, small enterprises, and medium enterprises, masking significant inequalities. Academic research identified that larger, more established SMEs receive disproportionate support volumes relative to microenterprises and startup ventures, likely reflecting both credit quality considerations and information asymmetries favoring better-resourced firms.
  • Employment Inequality and Skill Mismatch: While FTZ employment averages 1.8 times economy-wide wages, this masks significant inequality between high-skill professional positions offering premium compensation and assembly-line positions offering modest premiums. The concentration may contribute to rising income inequality and create labor market distortions where workers are drawn away from other productive sectors.
  • Sectoral Concentration Creates Export Vulnerability: Extreme export concentration in specific FTZ-produced sectors creates vulnerability to multinational relocation decisions and sector-specific global demand fluctuations. If multinationals relocate or sectors decline, Kazakhstan faces severe export contraction despite theoretical diversification objectives.
  • Structural Dependence on Commodity Revenue: The program budget allocation (421 billion tenge for 2020-2025 phase, increasing to 300 billion tenge annually by 2024) derives from government fiscal resources fundamentally dependent on oil and commodity exports, Kazakhstan's primary revenue source. This creates structural vulnerability: when commodity prices collapse, government capacity to maintain SME support simultaneously contracts due to fiscal pressures, creating paradoxical vulnerability where the SME diversification program depends on commodity revenues whose volatility necessitates diversification.
  • Inadequate Monitoring and Evaluation Infrastructure: Systematic monitoring of program participant outcomes beyond 2-3 year post-support periods remains limited. Tax administration has not published comprehensive independent assessments measuring intervention effectiveness, comparative instrument performance, or sector-specific optimal design. This limits institutional learning and evidence-based policy refinement.
  • Insufficient Complementary Reforms: While the program provides financing and support services, complementary procurement reform, export development programming, and regional capacity building receive inadequate attention. These complementary initiatives could substantially amplify program benefits through enhanced SME market access and competitive positioning.

CURATED BY

Tom Hancock

Research Associate
Global Entrepreneurship Network
United Kingdom