In Kazakhstan, the idea of creating a separate Agrobank is once again being discussed. Parliamentarians believe that such a structure could provide farmers with access to cheap loans. However, economists and political scientists remind us that similar attempts have been made before — and ended in crises and bankruptcies.
Political scientist Daniyar Ashimbayev recalled on his Telegram channel that as far back as 1987, the Kazakh Republican Bank of the USSR Agroprombank was created, later transformed into Kazagroprombank.
In the early 1990s, it became a key channel for agricultural lending, but by the middle of the decade it found itself in a difficult financial situation.
Between 1994 and 1996, the bank underwent restructuring and a series of reorganisations. As part of these measures, a new agricultural financing infrastructure was created — the State Fund for Financial Support of Agriculture, the State Food Corporation, and separate entities for grain contracts.
Part of Kazagroprombank's assets were transferred to these institutions. As a result, a significant share of agricultural resources and credit instruments moved into private hands, and the grain market was effectively privatised.
According to Ashimbayev, Kazagroprombank's exit from the market made way for large private banks, primarily Kazkommertsbank, which soon established financial control over the main production facilities in the agricultural sector.
An attempt to revive the sectoral bank through a partnership with the Russian group SBS-Agro in 1997 also ended in failure — the partner did not survive the 1998 crisis.
After this, the National Bank of Kazakhstan decided to wind down Kazagroprombank, and in January 2001 carried out a compulsory buyout of shares. The bank was soon sold to a private investor and transformed into Nauryz Bank Kazakhstan, which a few years later became mired in new scandals and ceased to exist.
Ashimbayev notes that in the wake of these failures, the government took a different route — creating new institutions to finance the agro-industrial complex.
This led to the establishment of the Fund for Financial Support of Agriculture, KazAgroFinance, the Agrarian Credit Corporation, and the national holding company KazAgro, which later became part of the Baiterek national management holding. Today, the Agrarian Credit Corporation is considered the main source of lending for the agricultural sector.
Nevertheless, the idea of creating a separate Agrobank is being discussed once again. According to Ashimbayev, farmers hope that a new bank will give them greater financial opportunities, but regulators and experts have concerns of a different kind — that such a structure could become a breeding ground for bad loans and corruption schemes.
It is worth recalling that the founder of the FBRK, Kirill Pavlov, previously expressed his position on this issue. He also noted that Kazakhstan already has a poor track record with creating a sectoral bank for agriculture.
According to Pavlov, sectoral banks lose their specialisation over time and start operating like ordinary commercial banks, making them unstable.
At the same time, Pavlov believes that instead of creating new institutions, the state should focus on making existing ones work effectively.
"In reality, it is enough for the current financial institutions to simply lend to businesses, rather than speculate on the base rate. They need to work with compliance, with risks, with business lending — just as is done throughout the world," he noted.