THE PLAN

INTRODUCTION

THE CHAPTER 1. ORGANIZATION OF CREDIT MUTUAL RELATION OF BANK WITH BORROWERS AT THE PRESENT STAGE OF ECONOMY OF RK.
1.1 History of the banks credit mutual relation development with borrowers. Credit system, its creation, and development in the Republic of Kazakhstan. 
1.2 Subjects of credit mutual relation and objects of bank crediting.
1.3 Risk of crediting of the borrowers and management of credit risk.
1.4 Warranty and guarantee as a way  of  obligations execution toward the creditor.

THE CHAPTER 2. THE BASIC STAGES OF BANK INTERACTION WITH BORROWERS DURING CREDITING.
2.1 Solvency of the borrower - basis of differential approach to crediting. 
2.2 Reliance and timeliness of credit return .       
2.3 Procedure both mode of distribution and credits’ repayment.
2.4 Credit contract - basis of credit mutual relation of bank with borrowers.
2.5 Prospect of development of credit operations in banks of the second level.

THE CHAPTER 3. THE ANALYSIS OF CREDIT MUTUAL RELATION CJSC " BANK CENTERCREDIT " WITH BORROWERS.
3.1 Organization of credit mutual relation on an example of the client " Bank CentralCredit “ and the Joint-stock company "Almatygorstroy"

THE CONCLUSION

THE LIST OF THE USED LITERATURE

INTRODUCTION

In any state the credit system substantially depends on an economy. Through credit system the state carries out policy of branch and regional development of all economy as a whole.
Financial organisations rendering credit service to the enterprises, organisations, population plays the extremely important role in development of economic structures. Efficiency and uninterrupted operation of the credit -financial mechanism functioning depends on not only duly taking decision by separate economic units, but also economic development level of the country as a whole.
The mechanism of credit system functioning constantly varies under influence of changes its organisational structure, the legal forms, realisation of credit operations, forms of crediting and settlement relations. Therefore now, banks of the second level are subjected to the special requirements on rendering credit-settlement service to clients as per commercial principles that include all kinds of credit, settlement, and financial operations connected to service of economic activity of the clients.
The credit in market economy is necessary, first, as the elastic flow of the capital from one branch to others and alignments of return rate.    
The credit is necessary for maintenance of funds turnover, enterprises operating, serving of goods sale. Due to the credit there is faster process of profit capitalisation, and, hence, concentration of manufacture. Without credit support it is impossible to ensure fast and civilised foundation of farms, small business, introduction of other kinds of enterprise activity on internal and external economic space.
In this connection a very essential subject is mutual relation of banks with borrowers. In conditions of the developing market relations the banks have refused an administratively command control system of economy
Now commercial banks show flexibility in mutual relation with the borrowers, functioning on the basis of a business competition, for attraction of the clients, credit resources and sphere of their favourable application, that promotes expansion of bank services and improvement of their quality.
The subject " Economic and legal basis of mutual relation of banks with borrowers " causes interest, because huge work on change of traditions in banking sector will be carried out now. Already many credit businesses have developed all opportunities providing highly skilled service to the clients. In many respects the basis for the planned tendency of economic growth in our Republic is the further development of its financial market.
The results of 2000 and first half-year of 2001 testify the positive changes, which have taken place in economy of Republic, including due to strengthening of communications between banks and real sectors of economy. The essential influence on these processes has rendered active crediting of the enterprises, which is for bank businesses in Republic the most traditional kind of activity. The most essential support was done for such branches of economy as an industry, trade, construction, and small business, credit investments considerably have increased, and the objects of consumer crediting to the population have extended.
The increase of deposit base promoted activation of crediting by banks of real sector, in September of current year the highest gain of the credits is fixed. The more vital sector of our economy, agriculture, has received poorly appreciable credit support. Distribution of the new credits in the large extent constrains unsatisfactory return on the given loans.
The development of economy is not possible without active crediting of real sector, therefore by prime task for regional bodies of authority, there could be a focusing on priorities of credit support as for branches of economy having decisive value for socially economic development of Republic. Therefore the main purpose must be the profound research of mutual relation of banks with borrowers in modern practice of crediting.
During research in work the following tasks will be solved:
- Evolution and economic bases of the credit relations of banks and the clients in conditions of the market;
- Organisation of credit mutual relations of banks with borrowers;
- Analysis of credit mutual relation

The object of research was the credit mutual relation CJSC "bank" with the building company " ".
Methodological basis of work: the legislative documents of the Republic of Kazakhstan, normative documents and practical materials of "bank", educational literature and materials of a mass media.

THE CHAPTER 1. ORGANIZATION OF CREDIT MUTUAL RELATION OF BANK WITH BORROWERS AT THE PRESENT STAGE OF ECONOMY OF RK.

1.1 History of credit mutual relation of banks with borrowers

The credit system of any state depends substantially on a type of economy as a whole. Modern definition of the credit and description of management art by its invariable using terminology of a business school and accounting, money flow, mechanism of marketing, liquidity. All these terms are used for illustration of fair human history for each period, those who has superfluous relation to money or goods, will use these means for stimulation of trade.
The idea of the deferred payment in exchange for the immediately acceptance of goods should always exist in the earliest landowners' communities, when man needs seldom coincides from his solvency
Fundamental nature of the credit is the element of trust existing between the buyer and the seller. Word "credit" occurs from Latin to credit-trust. The degree and variety of the credit over centuries is reflected by varied needs of a community for commercial structure.
The items of information on the credit were known, at least, 3000 thousand years’ back in Babylon, Egypt. The economy of medieval Europe represents a richest material for study of a history of the credit relations. Since the thirteenth century or even earlier trade bargains with wine, a grain, leather was based on the credit. Italian merchants were the people solvent, they paid in the advance payment to monasteries and other manufacturers against delivery of a wool in the following season and even later.
Not later, 1862 all legal obstacles for credit using by the companies with limited liability were cancelled. Use of the trade credit began to be distributed more and more and more widely in 18 and beginning 19 centuries. Quickly appearing of “banks county”, which lent money to the local industrialists, allowed that the credit has played a significant role in rise of an industry, but attempts of the control above the credit remains to be known a little. In last 100 years mechanisms of the credit continued to develop for satisfaction of changed society needs, but greatest number of these new methods evaluated in the field of the consumer credit. As against the trade credit the consumer credit rather recent appeared. While the privileged minority always used the credit, but the population prior to the beginning the nineteenth century had a low buying power, and the question on the credit for them did not arise. Exception was trade by instalments.
The purchase was by instalments entered by firm "Zingera" in middle of the twentieth century for simplification of sale of sewing machines. In the whole banks hesitated to open the doors to general public looking for the short-term credits and loans without guarantees in the form of real values. Not later 1950 the loans can be given without a guarantee to the persons with the steady incomes.
Study, how the credit was used in the various periods of a history and as its methods changed, emphasises the validity that the credit bases on two corner stones - trust and capital. The development of credit management was stimulated by necessity to have official ways of credit granting and control above it, as the nature of the trade credit became more complex.
The conditions of credit granting now stand near to such key factors, as the price and delivery of production. The credit system is characterised by set of the rules of law and approaches to realisation of credit operations, the banks occupy in it a conducting part, carrying out basic credit of credit and financial operations.
Each stage of economic development of a national economy meet the type of credit business and structure of credit system responding the appropriate requirements for credit-financial service.
In territory of Kazakhstan the bank system was submitted as branches of State and Industrial banks, and later as branches of other banks. The state bank (present its right is assigned to National Bank) was in that time analogue of the central bank. The first branch of Industrial bank was open on October 15, 1925. The necessity of the further growth of a capital investment has required creating the specialised bank, like Stroybank. Thus all long-term crediting was concentrated on Stroybank, and short-term is handed to State bank.
Image, directions and the forms of bank activity are varied by organisation of the new and progressive forms, methods of managing. In mutual relation with the client, bank is the partner enterprise. A principle “all for the client” emphasises subordination of bank interests to interests of the client. The partner relations are based on voluntary basis of both parties. Anything except for business can not force the client to choose bank, as well as bank. If it really professes principles of commerce, nothing can force to serve this or that client. 
The partner relations of bank with borrower are based on a principle of mutual interest. The commercial interest the bank realises not at once, and after the expiration of the certain time. In this connection this or that enterprise from a position of the profit, today client tests payment difficulties, however in a near future the potential losses, can turn back for bank as large profit. The trust won by co-operation and including in the difficult periods, both for bank, and for the client turns to that essential factor, which cements the partner relations between them. Through trusting the client practically receives advice how correctly to use resources, where it is more expedient to enclose money how to increase the profit. Anybody never refused the clients, them value and at an opportunity help.
Credit system, its establishment, and development in the Republic of Kazakhstan
The credit system of any state in a significant degree depends on a type of economy as a whole. The credit systems in centralised economies essentially differ from similar systems in market economies. It evidently is confirmed by those rough structural changes in credit system of our state, which occur now. The importance of credit system in economy of any country, certainly, is obvious. Through credit system the state carries out policy of branch and regional development of all economy as a whole.
The credit system is characterised by set of financial businesses, legal forms of organisation and approaches to realisation of credit operations. The banks occupy in it a conducting part, carrying out basic weight of credit and financial operations.
The process credit system creation in Republic leaves far in a history. Each stage of economic development of a national economy meets the type of credit business and structure of credit system responding the appropriate requirements for financial service.
As it is known, use of the product -money relations has caused of banks formation of a new type. So, alongside with State bank in Moscow the Industrial bank was created. The bank was created in 1922 as a joint-stock society with the right to distribute the long-term and urgent loans, to open the credit post restate in the form of the special current account under a pledge, account of the bills, purchase and sale under the order and at the expense of the industrial and trade enterprises of the goods having industrial value, shares, bonds and other operations. On the basis the joint-stock company "Electrocredit" in 1924 was created Electrobank.
In the territory of Kazakhstan the bank system was submitted as branches of State bank and Industrial bank, and later as branches of other banks. The state bank (its present assignee National bank) was in that time analogue of the Central bank. The first branch of Industrial bank was open on October 15, 1925. In process of expansion of industrialisation the demand of a national economy for long-term credit investments in a fixed capital grew. The necessity of the further growth of a capital investment has required to create the specialised bank, what has created Stroybank  on the basis of Industrial bank. Thus, all long-term crediting was concentrated in one bank - Stroybank, and the short-term crediting was handed to the State Bank. 
Image, directions, and forms of bank activity varied what new, progressive forms and methods of managing
To the moment of Republic independence the bank system of Kazakhstan was submitted by six banks: the State Bank (nowadays National bank), Vnesheconombank (nowadays functions are assigned to several banks: Alembank, Eximbank), Promstroybank (nowadays TuranAlembank), Agroprombank, Credsotsbank and Saving bank.
To the beginning of transformations in economy there were changes and in bank system. Thus, in the beginning 90 years the State Bank and line of commercial joint-stock banks submitted the bank system. Per the first years of formation of bank system two level of bank system was not brightly expressed, as the State Bank only was formed as classical central bank. The period with 1988 for 1991 became the first stage of formation of existing bank system. For this time the reorganisation of existing state branch banks was carried out and the first commercial banks are created.
Further number of banks began sharply to grow, the private and joint banks have appeared. Beneficial ground for occurrence of banks became a high level of inflation’s allowing easily to earn the incomes through negatively high return rate.
In 1992-1993 the status of bank system estimates negatively enough. Separate banks in the mercenary purposes used the infringement of the normal money manipulation. The cheap credit resources became attractive to the numerous businessmen.
In July 1993 the Association of banks of the Republic of Kazakhstan is founded. Association has received the applications from 35 banks. In spite of the fact that the Association of banks took active participation in all important measures, it has not developed in powerful interbank organisation capable meet interests of banks in state bodies, though the events of last days (possibility of bank crisis) show unity of banks at the difficult moment and necessity of uniting structure. If to consider activity of АБР (Association of banks of Russia) it is obvious, that, despite of complexities in activity of banks and centrifugal forces, АБР could turn to powerful force capable to advance the necessary decisions.
In October 1993 the group of the economic advisers of Southern Korea has visited Kazakhstan. After detailed study of financial and bank system the experts have met the President of the Republic of Kazakhstan and have offered the vision and decision of problems. They have offered to concentrate the capital in one - two large banks by association of existing large banks. Also it was offered to reorganise fine banks and to establish the minimal size of the authorised capital. The decision on increase of the minimal authorised capital was accepted little bit later, approximately in one half-year, and the offer on creation of large banks by merge was not realised. The development of bank system went by other way, and it is impossible to tell, what even now we have large enough banks capable to carry out financing of the whole branch or the large project. We have also very low capitalisation of banks as per the international standards. Let's assume that the large incorporated banks would be created, then it is quite possible, and that we would be more protected from appreciable losses of actives from inflation and numerous abusing.
Till 1994 the National bank poorly used classical prescriptive specifications for the control of banks of the second level. The controls of fiscal character were most expressed. Normative base of bank activity at this time was poorly advanced, that promoted numerous infringements, and enabled to carry out wrongful operations.
By the strong weakening factor of money system of Kazakhstan was the termination of the reference of banknote issued by the State Bank USSR and bank of Russia in 1961-1992. After that sharply increase volume of illegal import of such banknote on the territory of Kazakhstan, that has resulted in easing a financial system of the country as a whole, increase of a level of inflation and downturn of a standard of population living.
The period with 1992 up to the end of 1993 is the second stage of formation of bank system. Its basic features: gradual transition of National bank to performance of functions of the Central bank, extensive formation and development of commercial banks.
By strong push to occurrence of banks the introduction of own national currency promotes from that period began powerful extensive - intensive (quantitative and qualitative) development of bank system. The introduction of national currency has required by the National bank of active measures on maintenance of stability and of national currency. Owing to absence of experience and joint interaction of the National with government the idea of stable national currency has ordered long to live, down to middle of 1994. In that time compelled the practice of financing of budget deficiency was kept at the expense of direct borrowing. In it just contradiction of tasks facing to the National bank and government also consist.
In the beginning of 1994 there was a question about positiveness of the interest rates. Not a secret, that up to middle of 1994 the interest rate was negative, that had appreciable enough negative consequences. Let's name basic of them:
- Not competitiveness bank deposits;
- Superfluous demands for credit resources, therefore their constant deficiency;
- The negative interest rates promoted strengthening of inflation (in 1994 inflation has made 1258 %).
In September 1994 with the purpose to increase liquidity of the bank own capital were strengthened by the requirement to structure of the authorised capitals of banks of the second level. The restrictions on payment of the authorised capital not by money resources were entered.
Since September 1994 the new order of reservations providing defreezing deposited funds of commercial banks in the National bank and introduction of a payment for reserves, placed in the National bank is entered. It was authorised to banks to carry out the alternative order of reservation, which is more favourable. The payment was defined equally 25 % from the refinancing rate.
In October 1994 there were functioned about 200 banks in Kazakhstan, from them only 15 banks had the license for realisation of bank operations.
In 1994 questions of a payment revolution and stabilisation of national currency so urgent, that have caused even attention of the President of the Republic of Kazakhstan as acceptance of the special edict in August, 1994.
On January 1, 1995 there were 237 banks, from them 25 have the general currency license, and on the extent of the authorised capital concerned to the largest banks of republic. From common number only 8 banks had charter fund from 5 mln. dollars and higher.
The quantitative compression of bank system, which basic purpose is increase of reliability of bank system of republic began from January 1995. The compression of banks was reached by strengthening of the requirements of National bank, amplification of a competition between banks. The basic task of National bank became qualitative improvement of activity of all banks and formation of group (10-15) banks coming nearer to the world standards.
By February 1995 the national bank already uses the following classical money-credit tools:
- Regulation of volume of the credits refinancing
- Regulation of a level of the refinancing rate 
- Use of the mechanism of mandatory reserves
- Realisation of operations with state securities
- Intervention of National bank in the currency market.
For 1,5 years the tendency of a bank businesses network reduction is observed, as on the end of 1995 130 banks of the second level having the license of National bank on realisation of bank operations were registered, and their quantity has decreased for a quarter in comparison with January 1, 1995 and by third - since January 1 1994 -deterioration of the industrial enterprises solvency in Republic are reflected in parameters of bank activity (growth of the returned credits), thus banks are compelled to close a part of working unprofitable branches. The size of their authorised capital changed from 20 thousand tenge and as a whole has made more than 6,8 bln. tenge, that in 1,4 times is more, than was on January 1, 1995.
At the end of 1995 the process of liquidation was experienced by 62 banks, are really liquidated only 6. In no that cases this procedure lasted of the whole 2 years. The similar problems exist in Russia as well. Now mechanism of liquidation of banks is more fulfilled and does not take so long time. On January 1, 1998 there were 77 banks.
National bank as the body of state regulation applied efforts giving the necessary direction to changes in bank sector. Some processes already go not so spontaneously, for example, merge of banks, to which the mode of preference is created. On a number of banks, according to the legislation, probably, the mode of preservation will be entered.
Long enough time was one of the largest "former" banks - Agroprombank. The bank carries out settlement-cash service, tries to return the lost clients.
In 1995 the National bank has shown other opportunity of intervention in activity of banks of the second level. The largest bank of Kazakhstan Alembank was short time in temporary administration of the National Bank. National bank uses also mechanism to merge banks. So, in 1996 two large banks Turan and Alem, in 1997 – Zhilstroybank and Credsotsbank were merged.
One more method is the admission of foreign banks in the market of Kazakhstan, to purchase of those Kazakhstan banks, which are in a bad financial position. For example, in Poland was forbidden to foreign banks to open affiliated banks and branches, unless they got " in loading " problem Polish banks.

1.2 Subjects of credit mutual relation and objects of bank crediting.

Object of bank crediting, is that part of turnaround production assets and funds manipulation, which is formed at the expense of the bank credits. The object of crediting can be expressed, as in material assets both expenses of manufacture and manipulation, and as the obligations of economic organisations to bank, if the credit is given without material security.
Objects of crediting of material character are: seasonal accumulation of industrial stocks of raw material, basic and auxiliary materials, fuel, combustible, container, spare parts, purchased semi-finished items and some other material assets. And realisation of production causes the formation of such stocks. The banks give in the large sizes the credits to trade organisations under seasonal accumulation of the goods that provides creation of stocks in sufficient assortment.
The distinctions by way of registration, check of maintenance, ways of repayment of the credit allow to differentiate all credits under material assets on the credits serving all revolution of material assets, and credits participating only in a covering over the normative stocks of material assets.
In market conditions of managing the basic form of the credit is the bank credit, that is credit given by commercial banks of different kinds and types. Now in conditions of the developing market relations the economic nature of objects of crediting has changed also. The objects were integrated, and banks send from object of crediting to crediting the subject.  
The subjects of the credit relations in the field of the bank credits are the economic bodies, population, state, and banks. As it is known in business deal the subjects of the credit relations always act, as the creditors and borrowers. The creditors are the physical and legal persons given temporarily free money resources at disposal of the borrower on the certain term.
The borrower - parties of the credit relations receiving funds in usage and obliged to return them when due hereunder. As to bank credits, two persons, as the creditor and borrower serve the subjects of the credit bargains here. Banks work on drawing means, and, hence, in order to economic bodies, population, state, owners of these funds placed on the accounts with bank, represent itself as the borrowers. In point of redistributing the resources, concentrated at, for the benefit requiring from them the banks act as the creditors. The same situation is observed for other party of the credit bargains. Placing on the accounts in bank the money resources, they act in a role of the creditors, and, are being asked the loan, turn to the borrowers.
The formation of the market relations in economy of Republic is accompanied by change of majority of the subjects’ status of the credit relations. It is caused by deep changes in the relations of the property. Now in bank activity, as addition these relations began to be adjusted by the law about banks and bank activity.
Bank activity
The loans given in the money form characterise concrete display of the credit relations between bank on the one hand and borrower on another one. Within the framework of the bank loan the separate kinds of the loans develop. It is necessary to understand kinds of the bank loans their certain classification used for crediting by banks of the legal and physical persons. The importance of classification of the bank loans consists that the credit function of banks is the basic economic function and as far as it is good that they realise the credit functions, in many respects of the situation set between banks and clients.
In world practice for classification of the loans use the following criteria:
- As the borrowers on terms of use - on character of maintenance, conditions of use;
- On a way of repayment;
- On character of the interest rate, way of payment of interests;
- On currency of the credit;
- On number of the creditors;
- On conditions of realisation of the loans;
- On objects of distribution.
Most widespread in practice of banks is the classification of the loans as the borrowers. The loans to the commercial and industrial enterprises, mortgage (under a pledge of the real estate), agricultural, not to bank financial businesses, commercial banks, brokers and dealers to the participants of the securities market, private persons. 
The loans to the commercial and industrial enterprises are intended for financing expenses on updating turnaround and fixed capital. The part of the loans carries a seasonal nature. The receiving short-term loan by the enterprises easy for food-processing industry, trade.. The order of registration, distribution and repayment of the loans to the enterprises of an industry, trade supplying and other branches in Republic of Kazakhstan is regulated by Rules of short-term crediting of economy of Republic.
Mortgage of the loan is given out to civil engineering firms, as the form of interim financing during a building cycle. Category of the mortgage loans includes the loans to the private persons on purchase of immovable property under the mortgage. The features mortgage of the loans consist of the following:
- Rather low risk of distribution of the loan is supplied with the real estate
- The loans carry long-term character
- Provide to bank stable clientele
The agricultural loans - are given to the agricultural enterprises on financing of the seasonal charges, they, as a rule, have the rather small size, and are provided with a crop, agricultural engineering, and cattle. These loans carry averaged and long urgent character, and, hence, their granting requires guarantee maintenance.
Non banking financial businesses using the bank loan are the financial companies, investment banks, insurance companies, and loans saving association. The bank loans for these businesses are one of the basic sources of money funds, which they direct to various sorts of the credits, taking thus from a difference in percentage profit. The loans to commercial banks act by the tool of redistribution of credit resources between banks within the framework of the correspondent relations. The commercial banks can act as the borrowers and creditors the loans are redistributed in the interbank credit market and it are given for reception of the profit from a difference in interest or for maintenance current liquidity. Use of the interbank loan is caused by two circumstances. On the correspondent accounts of commercial banks in the central bank sometimes there is a surplus of funds, which creates superfluous liquidity that reduces profitability of bank. Therefore commercial bank is interested in favourable accommodation of superfluous businesses. The excess of demand compels for extra funds above the offer of credit resources of commercial bank them to receive the loan banks of the correspondents.
The loans to the brokers and dealers are given out for purchase securities, on condition post restate. Behind the loans for purchase of securities the physical and legal persons address.
The bank loans are given to the private persons in the form of the consumer credit and personal loans. The consumer loan can be given directly to borrower or indirectly through the various dealers. The consumer loan as against other kinds of the bank loans given for the industrial and enterprise purposes or for purchase of profitable actives is used for satisfaction of need in extra funds of the ultimate users - physical persons. This loan is connected to increase of a vital level of the population. It is given out on purchase of movable and immovable property. The banks can give out the consumer loans directly to borrowers, by direct crediting borrowers or to get the obligations of the consumers at the various dealers
The indirect consumer credit allows establishments of bank to increase volume of a credit portfolio without essential increase of the operational charges. The consumer loan depending on tools of crediting is divided into the check credit and credit cards.
The check consumer credits can be repaid or received on the account by the usual contributions, or special payments. Such accounts usually call overdrafts.
The bank credit cards are not based on the check accounts and assume participation of three parties: the owner of a card, bank and trade businesses. Plastic card with allocated symbols serves for the trade enterprises by the proof that the bank guaranteed opening the credit to the owner of a card. On each card the credit limit is established which can be changed, depending on that as far as circumspectly it is used when the client requires that. Except for purchase of consumer goods and services of credit cards use for reception of the loans in cash from bank.
   Many Kazakhstan banks now give the credits for payment of education (it TuranAlem bank), on purchase of habitation, crediting of the physical persons under a pledge of the real estate (Caspian, Eurasian banks).
One more developing form of the credit is leasing. Necessity of modernisation of manufacture, introduction of new labour-saving technology, reduction of moral service life of the equipment and its rise in price, attacks development of the market relations have caused need of qualitative fulfilment of lease operations by change of shape of the subjects of these operations and object of credit - rent. In a role leaseholder now act the leasing enterprise and organisations having powerful financial resources for purchase of the technologically complex, expensive equipment. Leasing represents averaged or long-term rent. The participating parties can be from two up to four. The obligatory participant of leasing operation is leaseholder, as which the manufacturers of leasing object can act as enterprise, or independent leasing firm, which are usually created at active obligatory financial participation of commercial banks, or these banks. Other obligatory participant of the bargain is lease maker, that is enterprise of a legal pattern of ownership requiring for concrete property and testing, financial problems. Besides, in the bargain usually participate the enterprise – manufacturer and the commercial bank financing operations, for example a company, which for realisation of leasing requires credit resources. The right of bank to fulfil leasing operations should be stipulated in its charter. The banks-leaseholders are considered as a maker of leasing. 
The development of the leasing was be done due to some general tendencies in economic evolution such as:
- Reduce in volume of liquidity assets of enterprises and organisations because of constant difficulties in money funds;
- Sharp competition, requiring optimisation of company’s assets;
-  Decrease in profit of company and organisation reducing opportunity to invest enough funds in development of company. 
Analysis of statistic data points out that leasing operations have steady tendency for growth and this process will be kept in future for Kazakhstan. Quick development of leasing operation in the Republic is restrained by shortage of needed equipment, methodological literature regarding organisation of leasing operation conduct. As the leasing operations go on the range of leasing makers will expand and the large industrial enterprises having own leasing and special leasing organisations will affiliate to commercial banks. 
Financial and commercial advantages of leasing will advance competition in mechanic industry, banking operations, implicate banks into financing scientific and technical progress for all spheres of economy. In the project of leasing operations the most complicated point relates to determining amount of leasing payments. For short-term rent leasing market condition significantly sets the amount of rent payments. 
The important condition of leasing transaction should be even advantages as for leasing maker so for leaseholder. It is necessary to remember that leasing is the form of financing stemmed from discount credit that is why here should be determined profit for bank from definite leasing transaction.  
The modern type of trade in point of crediting working capital of client is factoring. It binds over with payment documents having place between producers and consumers in the process of goods and service selling, cashing accounts receivables of client. 
Factoring operations are handled by special factoring companies that have close relations with banks or by their branches. Classic factoring bases on the credit with deferred payments for products delivered. The idea of factoring operations is that a bank purchases invoices of supplier for products delivered and receives the right to require payment for these products from the buyer. That is why factoring operations are called also credit sales of suppliers or factoring to supplier. 
At present factoring operations don’t develop in the Republic because there is so small amount of enterprises with stable income. Banks are subjected to strong risk by buying invoices of suppliers. 
One of the ways to present long-term export financing is forfeiting. Flexible and rapid way of producing long-term credit for foreign buyers. It is used for export sales if settlement has been done during some years. Forfeiting ties with long-term ordinary and transferring notes. Discount of notes is done on the basis of fixed rate. Forfeiting provides instant payment of export for seller and long-term credit from bank of forfeiter with settlement in instalment for buyer. 
Traditionally the essential function of commercial banks was credit of economy and population. Banks play role of financial intermediary because direct loans giving by owners of free funds is impossible indeed. All participants need this activity of banks. And it requires setting relations between them 

1.3 Risk of crediting of the borrowers and management of credit risk.

The credit risk - probability that cost of bank activity submitted by the sum of the given credits, will decrease or will be reduced to zero or actual return by the given credit appear much below expected level. The credit risk, or risk not of return of the debt, depends on such factors, as more often:
- Degree of concentration of credit activity of bank in any sphere sensitive to changes in economy;
- Densities of the credits and other bank contracts come on the clients, testing the certain specific difficulty;
- Entering pure or essential changes into policy of bank on granting the credits, formation of a portfolio of securities;
- Densities new and recently of involved clients and so on.

By results of the statistical analysis it is possible to make a conclusion, that the private and joint stock enterprises are more floppy and are effective, than state, but are ruined more often.
The risk of crediting of the borrowers depends on a kind of the given credit. Depending on terms of credit granting is from kinds of maintenance - supplied both individual and bank; from specificity of the credits - bank, state, commercial, credits of the insurance companies and private persons, syndicating and so on; from the kinds of debit - agricultural, industrial, municipal, on formation of turnaround assets, seasonal, investment, import or export and so on.; on the size - small, average, large; on a way of granting - bill, through the open accounts, seasonal. 
The percentage risk is a risk, at which the incomes of bank can appear under negative influence of change in a level of the interest rates. Interest risk is losses of bank because of adverse influence of change in a level of the interest rates. By such image, the interest risk is a decrease of the profit of bank owing to negative influence of unforeseen change in a level of the interest rates.

Management of credit risk
Proceeding from economic essence of formation and activity of any bank, the crediting - traditional core of bank business follows that. The credit operations are the largest source of the incomes and largest clause of actives. But thus as the credit portfolio represents also largest source for reliability and safety of bank. The problems of loan portfolios arising because of a mitigation of the standards of crediting, inefficient auditing of the credits, because of easing economy are the main reasons of the losses. The effective management of a credit portfolio promotes minimization is brave and profitability of loan operations.
It is possible to make of the objective analysis of activity of banks in the present time a conclusion, that the basic bank risk, management with which is the key factor determining efficiency of activity of bank, it is credit risk. Granting of the credit - usual operation for many types of the enterprises, but in bank business it borrows the most important place. The majority of banks receive an essential part of the incomes from credit and investment activity. The main task consists in estimating potential profit in relation to probability do not loan of the loan to the clients.       
The credit risk in the simplified form is possible to define, how the risk that the partner under the financial bargain will appear unable to execute conditions of the contract and the holder of an active will incur financial losses. A typical and most obvious example of credit risk is the risk that the client can not extinguish a loan. It is important to understand, however, that the risk of the potential losses at crediting is distributed also to a lot of other bank operations, including granting of the obligations and guarantees, operations with disposal of securities, and also various kinds of activity in the market of face values, such, as the future contracts, bond, action and option.
The world practice, as a rule, subdivides credit risk into two groups:
- Risk connected to the borrower, estimating probability of the potential losses;
- Internal risk of a credit product, which estimates the sizes of money losses in the event that the client does not carry out conditions of the agreement.
Before banks in less developed countries the serious difficulties in business of management of credit risk cost. The control on the part of government, pressure of external and internal circumstances of political character, difficulties of manufacture, financial restrictions, and failures of the market, often situations of instability in sphere of business and manufactures undermine a financial position of the borrowers. 
Moreover, the financial information is unreliable, the legal structure frequently does not promote performance of the obligations on repayment of the debt. In our Republic of difficulty of external character strengthen by internal weakness and are accompanied by the further deterioration of quality of actives.
The credit policy should cover structure of a credit portfolio and control above it, as uniform whole, and to establish the standards for acceptance of the concrete credit decisions. In bank system of Kazakhstan these parameters are adjusted by the economic specifications authorised by National bank of Republic of Kazakhstan. The banks can prefer lower risk level, than what is offered by regulating bodies. An initial stage in a rating by bank of credit risk and formation of a loan portfolio is the analysis of the credit applications. The rating of the credit applications is an analysis spent by the workers of a credit department with the purposes of definition of credit status of the borrower and probability of performance to them of the financial obligations. The process of a rating of the credit applications of the company is not limited to consideration only of financial risk. The appropriate rating of the client covers wider circle of questions, such, as quality of management, branch parameters, competitiveness, and strategic oriented (business - risk). The standard approach in the analysis of business - risk consists in application of system of a rating of risk. The results of the analysis of business - risk can be combined with parameters of financial risk and to receive a general parameter of a risk level for the company of the client.
For simplification of a task of definition of a general risk level it is necessary to develop system of classification of the companies on a level of financial risk. The analysis of financial risk in aggregate with business - risk gives result of a parameter of a risk level established for the company.
Having estimated all factors having the relation to the credit application, including business and financial risks, the employee of a credit department can establish a general parameter of a risk level of the potential losses and give the recommendations concerning acceptance or failure of crediting the client.
The various banks use various systems of a rating of credit risk, trying quantitatively to express a degree of prospective risk concerning a credit portfolio. In many banks in definition of a risk level rely on opinion of the representative of a credit department and on its ability to establish the appropriate parameters of a risk level for the bargain.
Use of parameters of risk requires the large care. It would be happened due to mistake to simplify process of the analysis, leaning exclusively on numerical parameters and - or systems of classifications. It is obvious, that the advantages in one area can equality lacks another. The systems of a rating can be applied wrongly, it is necessary constantly to watch, that the categories of risk should be defined correctly. In other words, final rating of credit risk in significant degree depends from:
- Quality of management of the company;
- Status of branch;                    
- Competitiveness of the company;
- Character of the credit application;
- Financial position of the company;
- Prospects of development.
The bank should not give the loan the enterprises in industries, in which the employees of bank engaged crediting, have not enough necessary technical knowledge and acquaintance to the market correctly to estimate the credit.

Rating of risk: five criteria.
Reputation. Solvency of the borrower to satisfy the obligations. The process of a rating should consist of personal interview, check of an origin as personal, proceeding from the recommendations submitted by the borrower, is especial in case of the personal loans, and business loan.
Opportunities: а) ability of the borrower to receive money on all operations (general inflow of money received by the borrower during enterprise activity during the period of its activity) or on the concrete project; b) ability of the borrower to operate money resources.
The capital. Capital base of the borrower and his determination to use the own capital in the project, on which it requests the credit. The borrower should be able to divide risk of the project with financing bank and to be agreeable on it, giving an acceptable part of the joint-stock capital, debtor should connect himself by the obligations.
Conditions. The current status and review of local, regional and national economy, and position of a borrower. The various economic conditions and various periods for different branches of a economy frequently require various loan criteria in different phases of a business cycle.
Pledge. The reliable maintenance of the credit can help with the form of a pledge of a guarantee to overcome weakness in other criteria. A good rule: never it gives the credits on a basis only of pledge or guarantee. It is necessary to consider the following factors: а) quality of a pledge: as far as the equipment is obsolete, liquid and as will go in the market as the pledge is protected from inflation; whether b) in case of default from obligations it will be easy to collect this pledge in the lawful order; c) what allowable parity of market cost of a pledge and size of the credit and as frequently it should be reconsidered.
The management of credit risk is a process and complex system. The process begins with definition of the markets of crediting, which frequently refer to as "the target markets.” It proceeds in the form of a sequence of debt repayment. The creditors expect, that it will pay all sums of the credit or loan, which they have given, plus, in most cases, they will receive periodic stipulated interest, while the credit will not be extinguished. They avoid risk and consequently want to limit the susceptibility to risk, or degree of uncertainty, up to a minimum. Actually they want to define a degree of the risk connected to the certain borrower and to a kind of the credit, which they collect to give, how they will give this credit, and on all extent of action of the credit.
Definition of categories of credit risk: the risk that bank will suffer losses in case the debtor can not extinguish the loan or execute the financial obligation of other character for any reasons. 
Risk of replacement: the risk that bank is compelled to bear the additional charges on replacement of the financial agreement under the rate, prevailing in the market, if other party of the existing financial agreement does not carry out the obligations according to the contract (for example, does not make percentage payments).
Risk of accounts: risk, which arises, when (within the limits of the co-ordinated appropriate exchange cost) the bank carries out payment (or issues securities), before it will be convinced that the rating cost is co-ordinated with the contractor.
The bankers aspire or, at least, should aim to avoid risk even more, than other creditors. Why? Because they involve not own money, and money of the creditors, the investors and other parties, which have supplied with their means. Their existence as bankers depends wholly on ability to involve these means on a renewing basis. This ability wholly depends on credit status of bank, as it understands by ours deposits, which, certainly, is defined by ability in time to return the contributions - and "in time" frequently means under the first requirement. The opportunity it, for bank, depends, in turn, on ability successfully to estimate risk connected to the loans, which it gives.
The international bank practice testifies that the banks should not give the credits one borrower in the sum exceeding 25 % of the own capital of bank.
Now the National bank of Republic of Kazakhstan will carry out politics of perfection of bank system, including - management of credit risks. In modern bank system of Republic of Kazakhstan there is a very complex problem of information interchange about the borrowers between banks. Banish on a trade secret, the bank does not open the information on the debtors, though thus frequently can become a victim of such absence of the information. Many banks have confronted with the borrowers who have received the credits in several banks simultaneously and rendering insolvent.
For the decision of this problem the Order of Government of National bank of Republic of Kazakhstan from 17.17.1996 № 246 authorises " a Rule about granting by banks of the second level of the information which is necessary for conducting of the credit register.” According to this Rule the banks of the second level are obliged to give the information including the personal information on the borrower and the credits, given to him, guarantees and other obligations, and also their delay, prolongation, repayment and writing off from balance to the National bank.
On official search of bank of the second level the National bank transfers it the following information on the borrower contained in the credit register: a total sum of debts, terms of its repayment, its classification, item of information on pledges, quantity of the banks - creditors of this borrower, without the instruction of the name of banks.
The National bank periodically directs all banks of the second level the lists of the unfair borrowers according to the information available in the credit register.
The uncertainty and raised risk level is a payment for received economic freedom.

1.4 Guarantee and guarantee as a way of  obligations fulfilment before the creditor.

One of widespread in practice of enterprise activity in point of the contracts are a warranty and guarantee, which sense is, that the certain person incurs the responsibility before the creditor for infringement of the contract by the basic debtor. In ГК 1964 between these two ways existed a basic difference in subject structure. The guarantee could take place only between socialist organisations, one of which was higher in relation to another, while the guarantee was used as between the citizens, and not submission by organizations. 
New CC does not do distinctions between a warranty and guarantee depending on subject of structure.
 Warranty is understood as a duty of one person before the creditor of other person to respond for execution of the obligation by the debtor soldiery (in volume of the complete debt or its part) with last. Guarantee is understood as a duty of one person before the creditor of other person to respond for execution of the obligation by the debtor subsidises (as applied to all duty or its part).
 For the contracts of a warranty and guarantee the written form under fear of their invalidity is established. Thus the notice in writing by the warrantor or guarantor of the creditor about acceptance on itself of the responsibility for execution of the obligation by the debtor and absence on it of objections of the creditor is equated to the written form of the contract.
Warrantor responds before the creditor of the debtor subsidises. The guarantor responds before the creditor of the debtor soldiery with the debtor. The warranty arises on the basis of the contracts or is established by the legislation. 	 The guarantee arises on the basis of the contracts. Guarantor bears responsibility within the limits of the sum specified in a guarantee, if other is not stipulated by conditions of a guarantee. The warrantor responds before the creditor in same volume, as well as the debtor, including payment of interests, legal cost on collecting the debt etc. losses, if other is not established by the contract
Before presentation of the requirement to warrantor the creditor should accept reasonable measures to satisfaction of this requirement by the debtor. Warrantor there is no duties on attraction of the debtor to business, as warranty bears responsibility only after the decision of a question on the responsibility of the debtor. The warrantor is obliged up to satisfaction of the requirement of the creditor to warn about it the debtor, and if to the guarantor the claim, - is showed to involve the debtor in participation in business. 
The legislation can provide the specific requirements to the subjects and order of distribution of a guarantee, without which accounts the validity of the contract of a guarantee can be put under doubt. On a number of actions of proceeding, respondents in which the banks - warranty acted, the court refused in satisfaction of the requirements of the creditors that the legislative requirements about necessity of a mark of the National Bank on the warranty contract about acceptance of warranties are not executed and there is no license for distribution of warranty.
The analysis of judicial practice shows the basic mistakes and omissions admitted by the participants of the relations on a warranty and the guarantee. To them concern: the marked above absence at banks of the licenses on distribution of warranty and guarantee; do not engage to participation in business borrow; do not submit of measures to collecting funds is direct with borrow; infringement by the officials of authorised powers on signing warranties and guarantees; wrong definition of consequences rights at liquidation of the legal persons acting in quality warranty or the guarantor etc. At registration of warranties the requirements of the legislation, in particular, with reference to the responsibility warranty are not taken into account. For example, in many letters of warranty which are given out by banks of Аlmaty, it is underlined, that the creditor has the right at do not return by the debtor of debts to write off the sum of debts from the account of bank - warrantor. Such right of the creditor can take place only at the guarantee with his soldiery responsibility of the warrantor and debtor, but not at a warantee.

The legislation establishes subsidise the responsibility guarantor. In this connection a lot of questions causes rule of item 3 of an item 332 ГК that up to presentation of the requirements to guarantor creditor should accept reasonable measures to satisfaction of this requirement by the debtor. The code, naturally, can not give decoding of such estimated concept, as " reasonable measures,” having named only two of them: offset of the counter requirement and manipulation of collecting on property of the debtor when due hereunder. The courts do not have uniform position on a question on, whether the finding - out by the creditor through bodies of traffic police of presence at the debtor of a motor vehicle, and through bank of money on the accounts, or, for example, attempt of reception concerns to " reasonable measures " at the expense of the revealed property and means, from the basic debtor in the voluntary order of the debt.
It is probable, the situation of the creditors will be considerably facilitated with introduction of reliable system of registration of the real estate. According to the Decree of the President of Kazakhstan from December 25, 1995 " About state registration of the rights on immovable property " given about the made registration should be given by a recording body to any interested person. As the real estate is one of the basic subjects of collecting, at courts occurs easy attractive an opportunity to establish, whether the creditor accepted preliminary measures for finding - out of presence at the basic debtor of the real estate, whether and the creditor tried to satisfy the requirements at its expense. But, nevertheless, to interests of the creditor in the greater measure there meets not the blurred enough requirement of acceptance of reasonable measures on reception of the debt, and establishment of the precisely certain duty of the creditor on acceptance before presentation of the requirement to guarantor of measures stipulated by the legislation, for reception of the debt from the basic debtor. In this part it would be desirable to change edition of item 3 of an item 332 ГК.
To a duty of the debtor, performer the obligation supplied with the warranty or a guarantee concerns the immediate notice on it of the warrantor or guarantor. 
The default of this duty can entail repeated execution of the obligation by the warrantor or guarantor, which in such situation have option: or to collect from the creditor superficially received, or to show regressive the requirement to the debtor.
When the warrantor or guarantor execute the obligation, to them pass the rights of the creditor in that volume, in which they have satisfied the requirement. 
The warrantor, as against guarantor, has the right it to require of the debtor of payment of interests for the sum paid to the creditor, and compensation of other losses. The rules about consequences of execution of the obligation by the warrantor carry despotise character, that is are applied, if other is not established by the legislation, by the contract or does not follow from the relations between the warrantor and debtor.
The warranty and guarantee by virtue of a general principle of the conventional law -pacta sunt servanda - can not be stopped by virtue of unilateral freedom. 
However they can be stopped on other bases. One of the bases is the expiration of terms for the application of the requirements to warrantor and guarantor. 
These terms are increased that raises real value of considered ways of maintenance of execution of the contracts. By the former legislation the guarantee was considered stopped, if within three months from the date of approach of obligations execution by the debtor the creditor did not show the claim to the guarantor. 
Now, according to an item 336 ГК the warrantor and guarantee stop after the expiration of a target date specified in the contract of the warranty or a guarantee. When such term is not established, they stop, if the creditor within one year from the date of approach of term supplied with the warranty or a guarantee of the obligation will not show the claim to the warranty or guarantor. When term of execution of the basic obligation, is not specified, can not be determined or is defined by the moment of claming, the warranty and guarantee stop, if the creditor will not show the claim to the warrantor or guarantor within two years from the date of the conclusion of the contract of the warranty or guarantee. The given terms to not be terms of limitation of actions, their expiration forms the basis not to removal by court of the decision about failure in the claim, and to the termination of the guarantee, therefore they are not subject to restoration by court.
Except for the expiration of terms, warranty and guarantee stop: а) with the termination of the obligation, supplied with them; b) in case of change of this obligation attracting adverse consequences for the warrantor and guarantor and made without the consent last; c) is while translating long under the supplied obligation, if warrantor and guarantor disagree to respond for the new debtor.
It is necessary to pay attention to distinction between the legislation of Kazakhstan and Russia on a question on a warranty and guarantee as ways of maintenance of the obligations. In the Civil Code of Russian Federation these both ways are covered by one concept of the guarantee, thus the general principle of the solitary responsibility of the warrantor and debtor is fixed. 
The term "guarantee" is used for the special relations between bank, other credit businesses or guarantor, on the one hand, and principal - with another, about payment to the creditor of the principal of the money sum according to the given guarantee. Thus the law does not put a duty guarantor to pay the appropriate sum depending on the obligation supplied with a bank guarantee.

THE LEGISLATION CONCERNING GUARANTEES AND THE GUARANTEES.
- Civil Code Р To (General part) (item ст.329-336)
- Law of Republic of Kazakhstan from December 24, 1994 " About the foreign investments " (item 5).
- Decree of the President of Kazakhstan from August 31, 1995 " About banks and bank activity in Republic of Kazakhstan " (item 30 of item 3 "в").
- Decree of the President of Kazakhstan from December 25, 1995 " About state registration of the rights on immovable property " (item 22).
- Rule of short-term crediting authorised by the National Bank of Republic of Kazakhstan by February 11, 1994.

THE CHAPTER 2. THE BASIC STAGES OF WORK OF BANK WITH LOAN DURING CREDITING

2.1 Solvency of borrower and methods of its appraisal. 

	The process of crediting sets link between many and different factors of risks and enables to cause uncollected debts on a definite period. It creates necessity to use specific approach to every borrower. Credit risk depends on external factors (economy on whole) and internal factors (internal policy of bank). The opportunities to control external factors are limited. Therefore the essential leverages of risk control lies on internal policy of a bank. The objectives and tasks of solvency analysis is in definition of borrowers capacity to pay its debt in time and full amount. The overall appraisal of financial position of borrower and discount of feasible risks on credit operations allows effectively managing credit resources and making a profit by bank.
	To appraise the solvency means to give prospects in point of credit return.  
	Analysis of borrower solvency is started from analysis of sources for payment of credit. This analysis lets to make decision regarding matter whether to continue further consideration of application from client in point of credit or to refuse it.  
	In case of preliminary positive decision the study of client solvency and prospective project is continued. The whole activity of borrower is analysed in order of time with aim to define tendencies in company business running. 
	The footing of applicant’s appraisal proceeds from different indicators. The more traditional indicators are credit ratio, capital, and credit capacity, cash flows, collateral. 
	There is used rule of five C: character, capital, capacity, collateral, conditions. 
	Under the “character” we consider reputation, level of responsibility. Bank tries to clear up credit history of borrower, receive its psychological portrait using files, consulting talks with other banks. Financial capacity of borrower in order to pay credit is defined by hand of analysis of its income and expenses and perspectives of their changes in future. A borrower has three sources of funds for loan payment: current cash receipt, assets sale, other financing sources. 
	Usually banks make great notice of firm’s capital, its structure, and relation with other items of debit and credit and loans collateral, its reliability, quality and level of collateral liquidity in case of failure to pay. 
	General economic conditions such as business climate in country, condition of economic position, competition, taxation have great importance for banks in point of loan decision as well as credit history of a borrower. Most of the banks believe that collateral of loan is not important question. The collateral is taken for compensation of risk on one or some factors of solvency. 
	Each application for credit is unique itself. Sometimes one factor has the significant role in making decision but at other times it is not considered as dominant factor. Banks should analyse many different sources of information about borrower for making own opinion about it. 
	 Financial statements of borrower including balance sheet, income statement serve as main sources of information. All changes and dynamics of balance sheet items and income statement are under investigation for creation of full picture about company activity and methods of its functioning in the market. Employees of the banks making decision about loans should not consider only data of previous years because in case of losses the financial position of firm quickly gets worse. The main aim of data for last years is to help to appraise the reliability of forecasts. 
	The account receivables should also be under thorough study because they are more close to cash money and can serve as the main source for payment of short-term debt. If employee of bank comes to conclusion that many accounts are paid with infringement of crediting conditions, he has the right to require Control balance sheet for last year. Banks have great interest in ageing, liquidity, and stability of prices for inventory. Adherence to depreciation or damage inventories insurance and method of recording has the great importance for banks. 
	The fixed capital is not deemed as source of funds for payment of debt. But in case of long-term crediting the fixed capital gets great significance and is defined by capacity to bring income. Intangible assets (goodwill, trade marks, patents) are not very important things for banks. 
The commercial banks are interested in extent and maturity of payments for all liabilities of applicant. It every time appears that a firm has unrecorded or hidden liabilities. Such kind of debts can be found unexpectedly and bring serious consequences in point of solvency for a firm. Company revenues are the definite indicators of its assets quality, entered into balance sheet, and management effectiveness. The importance of statement analysis regarding revenues grows up as the maturity of loan becomes longer. This analysis gets appraisal of stability in business operations for firm. And here it is necessary thoroughly to check methods of recording for avoiding events when last year’s data become to be incomparable. 
Financial statements are the informational source for calculation of financial coefficients, which are useful for analysis of financial position of the company. Coefficients should be considered as complementary tools for diagnosing areas of further investigation. 
Study of solvency embraces analysis of coefficients showing relations between different items of balance sheet. These coefficients being used in analysis of solvency can be presented as the following groups: 
- Liquidity ratios;
- Turnover ratios;
- Long-term solvency ratios;
- Cash flow adequacy ratios
	The range of solvency is defined by level of ratios and their rating. Contingent consideration of borrowers upon level can be done on the basis of the following ratios offered by the National Bank: 
Current ratio - shows ability of a borrower to convert assets into cash for debt payment. The higher ratio says about higher reliability of a borrower:
CR = current assets/current liabilities

Quick ratio - measure of short-term debt-paying ability. The higher ratio points to higher amount that can be get by a borrower:
QR = (cash  + market securities + accounts receivable) / current liabilities

Ratio of owns working capital security - measure of own funds extent. The higher share of own funds in working capital means higher reliability of a borrower from view of a bank:
WCR = (current liabilities - (current assets + losses))/ fixed assets

Averaged ratios are the basis for posting a borrower to second level, ratios being higher than averaged should be posted to first level and ratios being lower than averaged are posted to third level (see table 1). Appraisal of borrower solvency can be summarised to one ratio - rating of a borrower. Rating or importance of ratio is defined by stuff of a bank individually for each borrower in contingency upon policy of a bank, client distinction, liquidity of its balance sheet, position in loan market. (See table 2). 
The total appraisal of borrower solvency is done in points being presented as multiplication of each rating driver and level of solvency.   
In aim for appraisal of solvency the commercial banks should use not only main but complementary ratios characterising turnover of inventory or accounts receivable, share of liquidity funds in total amount of working assets, proportion of liquidity assets and debt, level of non-payments for last period.
At the same time as ratios are calculated there are made some attempts to find level of solvency through automatization of analysis by hand of equation with selected factors affecting solvency. 
These ways are convenient for preliminary definition of financial position of a firm but they cannot be perfect and have their own faults due to not considering distinctive traits of a company at that time. 

Contingent level of a borrower (table 1)
	1 level	2 level	3 level	
CR	0.2 or more	0.15 - 0.2	less than 0.15	
QR	2.0 or more	1.0-2.0	less than 1.0	
WCR	more than 60%	40-60%	less than 40%	
Rating of a borrower (table 2)
Driver	Level	Share %	Calculation	
CR		30	3 x 30 = 90	
QR	2	30	2 x 30 = 60 	
WCR	2		2 x 20 = 40	
			190	
The borrowers with amount of points from 100 to 150 must be posted to 1st level; from 151 to 250 points - 2nd level; from 251 to 300 points - 3rd level.The capacity of timely credit returns.	To return debt is the fundamental trait of credit relations, distinguishing them from other economic relations, and it expresses itself in definite mechanism. On one side it lies on economic process, which relate to return of debt, on other side it lies on legal relations of lender with borrower stemming from their position in credit transaction. Economic footing of credit return is characterised by turnover of participant’s funds and principals of credits functioning. 
	The economic basis of credit return does not mean that this process is automated. Only target management in point of loans flow can save it and compared when loans are given and paid. Credit transaction proposes liabilities of borrower to pay debt. 
	In the practice, we see that available liabilities do not mean that debt will be paid in time and without failure. Inflation process in economy can cause devaluation of loans amounts given and getting financial position of borrower worse. 
	International experience of banks operating worked up mechanism of credit return, including not only order of payment and its legal presentation in credit agreement but also forms of full and timely return of loans. 
	The system of guarantees in point of timely return becomes important issue for banks due to development of different forms of enterprising. Their solvency cannot be simply appraised in many cases that is why here the one of the important issue in order to set credit relations should be usage of additional ways for loans security. 
	Here, additional ways of loan security means specific source of debt return, legal confirmation of lender right to use it, arrangement of bank control for enough extent of this source. If way of loan payments, its recording in credit agreements is the main prerequisite for loan return then form of debt return security is the guarantee of its return. The guarantee is needed in case of high-risk rate of payment deferral. The forms of loan return give the guarantee to creditor to save its loan portfolio. Revenue from products sale is the main source of loans payments. However, it cannot be usual form of guarantee. As the real guarantee it can be considered only if financial position of a company is stable. In addition, the enterprises, which are not, classified as the best need additional real guarantees of return. 
	Below you can find out the forms of credit security:
- Pledge of property and rights;
- Concession of claims;
- Assignment of ownership rights;
- Guarantees and warranties;
- Insurance

	These forms of credit security are issued as special documents having legal force and give to creditor the special source of payment in case if a borrower doesn’t have funds for payment on the end of maturity date. 
	In Kazakhstan the structure of credits diving has the main share of mortgage - 77%, guarantees and warranties - 21% and insurance - only 2%. 
	The pledge of client’s property is one of the more popular forms of loan security. Banks and special financial institutes, giving loans against financial tools hold mortgage operations. The pledge is realised as security way when liabilities are covered by pledged property dominantly toward other creditors if borrower does not fulfil its obligations. Loan against mortgage is given on the amount of 50-90% of pledge value.   
	Lender should pay amount of main part of pledge, expenses linking to its saving and sale. The higher risk of non-payment means higher difference between value of pledge and amount of loan. The pledge comes from agreement and legislation edicts when the liabilities indicated in them are appeared. The pledge agreement should consider:
- Subject of pledge and its appraisal;
- Extent and maturity of liabilities;
- What part of agreement has pledge and degree of its using. 
	When agreement is signed, the following documents must be produced:
- List of property being used as pledge;
- Warehouse documents on property;
- Documents concerning rent of warehouse (if premise is rented);
- Documents confirming ownership right on property;
-Copies of insurance documents on transferred property, inventory, customs declarations (if property was purchased abroad), quality certificate in order to state testing (foot and medicine products)
	The pledge contract is the legal document that should be done in written separately from other obligations. It must be registered in bodies making registration of property where notice of registration is issued and in case of change in nature or content of debt claim there is made additional registration. The subject of pledge can be presented by different property including things and ownership rights and excluding property taken away from circulation, claims closely linked with personality of borrower, particularly claims about filminess, making harm to life or wholesomeness or other rights, whose concession to other persons is prohibited by law. 
	Claims in point of loan subject:
- Ownership right on the subject;
- Full ownership of using and managing;
- Absence of claims from other creditors;
- Matching quality requirement;
- Acceptable number;
- Legal presentation of pledges agreement
	As per roles of short-term crediting in Republic of Kazakhstan the following items cannot be included in pledge:
- Quickly spoiling raw material;
- Work in process;
- Foot products and inventory that are not up to requirements and out of demand from side of consumers
	If the subject of mortgage became unsuitable or damaged or ownership rights and right for its using are stopped on the basis stipulated by the legislation edicts, maker of pledge has the right to restore the subject of pledge during sensible period of time after receiving claim from pledge-holder and maker of pledge is banded over toward pledge-holder for the losses incurred due to failure of liabilities. 
	It is necessary to make notice that usage of client’s property in kind of security for loan return contains some inconvenient points. The borrower who must give to lender definite property in kind of pledge meets with necessity to call it out of outstanding.
	Borrower doesn’t receive any advantages from depriving itself of ownership right on moving property. On other hand if property being considered as mortgage remains to be at borrower then it can creates risk for lender and cause necessity to take steps in point of control for its saving, checking documents and actual being this property as well as its size, condition and storage position. Having regards to subject of pledge we can mark the following kinds of mortgage:
- Pledge of client property;
- Pledge of the rights
	The pledge of client property includes inventory, accounts receivable. This kind of pledge is used as kind of cession and has some disadvantages in order to inform its buyer about fact of pledge because most of the clients don’t desire to disclose their financial condition. 
	Securities paper pledge - is guarantee of credit return presented by financial stability of a company issued these papers
	Notes pledge - here we should consider maturity of note, quality and assortment of goods being sold in instalment, the pledge is defined by necessity to record execution of trade transaction.
	Pledge - the property remains on hands of borrower, contingency to receive property in kind of pledge in different transactions simultaneously, simple approach to control for subject of pledge storage and required registration of pledge in land books. The credit mortgage operations are recorded as real estate in transactions. 
	Interspersed pledge is considering crediting combined inventory stocks, including products at warehouses, goods documents, and notes. 
	Property for posting it to pledge should meet two criteria’s - demand and number. Quality and capacity to control its storage define demand for inventory in kind of pledge by creditor. 

The following criteria’s of quality for inventory are proposed:
- Quick realisation;
- Relative stability of prices;
- Insurance possibility;
- Long-term saving
	More reliable method of insurance of pledges saving transfers it to bank of creditor. A borrower continues to be owner of pledged property but it has conventional ownership of this property. It cannot manage pledged property and use it. Such kind of pledge is called pledge deed. The pledged property is transferred to ownership of pledge holder. 
	This kind of pledge operates in two forms. Solids pledge -it provides continuing mortgaged property in order of amount and content. In this case a borrower doesn’t have opportunity to get waste of this property independently on that whether they are at the warehouse or other place. 
	The pledge of the rights - has been adopted in our Republic beginning from 1992. This kind of pledge relates to ownership rights that can be alienated. In aim for providing that moving property can be used by borrower and at the same time continues to be guarantee of credit return there is taken assignment of ownership rights to creditor for security of debt.  Bank must verify that a borrower is owner of specific property indeed having signing a contract in order to assign ownership rights. 
	The essential form of pledge with property remaining at pledges maker is the mortgage of goods outstanding, processing or real estate. 
	Pledge goods in outstanding are used for crediting trade organisations. Goods are used and at borrower’s disposal. Pledge of goods in processing is used for crediting industrial enterprises. The distinctive feature of these pledges is the right of borrower to use pledges raw material or inventory in production cycle, including semi-products and finished goods. 
Pledged operation are widely distributed in a civil revolution, is especial about reception by the managing subjects of the commercial credit. For this reason legal man pays the large attention to a question of regulation pledged infringement is given. Now pledged relation beside by the following of the acts:
1. Civil Code of the Republic of Kazakhstan (item 51,299-329).
2. Decree of the President РК, valid of the law, " About mortgage of immovable property.”
3. Decree of the President РК, valid of the law, " About state registration of the rights on immovable property and bargains with it.”
4. Decree of the President РК, valid of the law, " About ground " (item 56-59).
5. Decree of the President РК, valid of the law, " About economic companies " an item 61.
6. Decree of the President РК, valid of the law, " About bankruptcy " (item 21). 
Being by one of execution ways of the obligations, the pledge, nevertheless, occupies among them the special place. It is caused by presence of several of the negative phenomena in economy of republic - inflation, not of return of the bank loans etc.
 Such widespread earlier ways of maintenance of the obligations, as the penalty and guarantee, now lose practical sense since to find reliable grant in conditions of crisis non-payments very difficulty and the creditor practically loses an opportunity to check up solvency of warrantor. Same it is possible to tell and about the penalty. If the debtor has no an opportunity to pay the basic sum of the debt to speak about payment them of the penal sanctions for inadequate performance of the obligations it is not necessary any more.
 As against set forth above ways of performance of the obligations the pledge has a number of advantages.
 First - the pledge is a way of maintenance of the obligations and, by virtue of it, the creditor does not depend any more on the person of the debtor or warrantor, since the execution of the obligations provides a thing, instead of person.
 Second (follows from the definition of a pledge) - obligation, supplied with a pledge, is satisfied from cost of the incorporated property mainly before other creditors.
 Third - for the debtor by good stimulus of appropriate execution of the obligations is real danger to lose property or property rights.
 Fourth - despite of inflation, the creditor has an opportunity really to compensate all losses which have arisen on fault of the debtor, since a subject of a pledge is the valuable and liquid property, the safety and which presence on the moment of account of the debtor with the creditor is supplied with the contract of a pledge.
 Subject of the contract of a pledge, according to an item 301 Civil Code of RK, can be any property, including thing and property rights (enterprise, building, structures, equipment, other production assets, money resources the securities etc.), except for things withdrawn from a revolution (kinds of things, which alienation is not supposed, should be directly specified in the acts), requirements indissoluble connected to the person of the creditor (in particular, requirements about the alimony, compensation of harm to life and health, other rights, which concession to other person is forbidden to the acts). Be right of a pledge can by the contract is distributed on property, which will actin the property of pledge maker in the future.
 At the same time, legal man has provided, that the pledge of separate kinds of property can be limited or is forbidden is, in particular, property of the citizens, on which, according to the civil-remedial legislation, the collecting (apartment house with buildings at the persons is not supposed, which basic occupation is the agriculture, children's accessories and others). 
By rules of short-term crediting РК, authorised by the Order of Government of National Bank РК, it is forbidden to banks of the second level to take in a pledge:
- perishable raw material uncompleted manufacture, products of a feed;
- material assets, the conditions of which storage do not provide safety, that can result in their damage or destruction;
- material assets and production, which irrespective of term of a storage can not be used in manufacture and are not in demand at the consumer;
- securities which have been not intended for sale in the market.
It is necessary to note, that the above named rules are not the law and the restrictions, established by them, carry specific character, limiting pledge capacity only concerning application of a pledge in bank activity.
 As it was already specified above, a subject of a pledge can be and property rights. These rights should have ability to be transferred, only in this case they can be a subject of a pledge. The urgent right can be a subject of a pledge only before expiry of the term of its action. In a pledge the debt requirements, right of the author to compensation the debt requirements, right of the author to compensation the debt requirements,
 Despite of apparent simplicity in an establishment of a legal mode of property transmitted to a pledge, in practice it is difficult to make it, and very much frequently it is difficult to define, that is a subject of a pledge. One of such examples can serve mortgage of the enterprise or other property complex. Pledge maker, as a rule, holds back, and pledge holder does not try to find out, what equipment and the mechanisms which are included in a property complex, are the property pledge maker, and what are taken by him in rent or are received in leasing. Thus, according to clause of 309 Civil Codes of Republic of Kazakhstan the right of a pledge is distributed to all property complexes.
 At acceptance in a pledge of property received in leasing, pledge holder it is necessary to know the following: while pledge maker will not pay all payments, due on the contract, it is not the proprietor of property, transmitted to a pledge,, nevertheless, right of a pledge be agrees parts II an item 301 CC RK can by the contract of a pledge is distributed on property, which will act in the property pledge maker in the future. Thus pledge holder bears additional risk, as his opportunities on satisfaction of the requirements at the expense of the incorporated property depend on execution of the obligations of pledge maker under the leasing contract.
 Without precise definition of a subject of a pledge it is impossible correctly to define liquidity of property, given in a pledge, volume of the requirements, which can be ensured with a pledge, way of satisfaction of the requirements of the creditor from a pledge.
The subjects of pledge infringements are pledge holder and pledge makers.
Pledge holder - person, which accepts property in a pledge is the creditor under the obligation supplied with a pledge.
Pledge holder, which should have an incorporated property, have the right to claim it from another's illegal possession, at whom it would not be, including at [ledge maker.
Pledge holder has the right to use the transferred subject of a pledge, if it be stipulated by the contract, moreover, on it can the duty is assigned to take from a subject of a pledge the incomes with the purposes of repayment of the basic obligation.
Pledge maker - person, which has transferred the property rights in a pledge. Pledge maker can be both debtor, and third person (the guarantor).
By a general rule, pledge maker is the proprietor of pawned property can act, at the same time, with the consent of the proprietor, pledge maker is the person having the right of economic conducting on pawned property, right of rent or other right on an another's thing can act also, if it is stipulated by the act or contract.
At mortgage of the real estate the direct participant of pledge infringements is also body which is carrying out registration of a pledge. According to an item 5 of the Decree of the President of Republic of Kazakhstan valid law, " About state registration of the rights on immovable property and bargains with it" a body which is carrying out registration of a pledge, is the Ministry of justice. It is necessary to note, that in a duty of a recording body enters not only account of the property right, other rights, and liabilities on immovable property, and check of conformity of the documents, submitted on registration, (in particular, confirming right on the real estate) requirements of the law, establishment of capacity of the citizen who has addressed with the request for registration of the right, and granting of the information about the made registration and registered rights to any person, who has addressed behind it(her). Moreover, the recording body bears responsibility and compensates the losses caused to the applicant by infringement about registration and distribution of the information. 
The decree of the President of Republic of Kazakhstan valid of the law, " About mortgage of immovable property " names one more participant of the pledged relations is a close confidant, which will carry out realisation of mortgage in out of legislation order. The close confidant is defined in the pledge contract, and if it is not made, is nominated itself pledge holder. In a duty of the close confidant the organisation and tendering enters at realisation of the incorporated property in out of legislation order determined by the above named Decree.
                  
The manipulation of collecting on the incorporated property and order its realisations
The basis of the manipulation of collecting on the incorporated property is the default or inadequate execution by the debtor of the obligation, supplied with a pledge.
At the same time, in circulation collecting on the incorporated property can be refused at simultaneous presence of two conditions.
First - the infringement by the debtor of the obligation, supplied with a pledge, is extremely insignificant, second - the size of the requirements pledge holder thereof infringements obviously are not proportional to cost of the incorporated property.
The realisation of the incorporated property can be made by the following ways:
     а) In the judicial order;
     б) In he out legislation order established in the above named Decree;
     в) Manipulation by the creditor of the incorporated property in the property. 
In the judicial order the realisation of a pledge is made on the basis of the decision of court on the claim of pledge holder. If a subject of a pledge is the immovable property, its realisation is carried out from public tenders in the order certain item art. 399-405 of the Civil-remedial Code КаzSSR. It is necessary to note, that at presence of the valid reasons the court at the request pledge maker has the right to defer realisation of immovable property for the period of 1 year, if:
     - Pledge holder is the citizen, and pledge maker does not connect the pledge to realisation of enterprise activity;
     - A subject of a pledge is the ground area from structure of grounds of agricultural purpose.
The delay of realisation of mortgage is not supposed, if:
     - In the relation of pledge holder or pledge maker is the business about a recognition by his(its) bankrupt is exited;
     -The delay can entail essential deterioration of a financial position of pledge holder.
In out legislation order the realisation of a pledge is made only in case the acts or agreement of the parties stipulates it. Thus the realisation of the incorporated property in out legislation order, when is not supposed:
- For mortgage the real estate needed the consent of other person or body;
- A subject of mortgage is the immovable property having significant historical and cultural value;
- A subject of mortgage is the real estate which is taking place in the general property and at it there is no written approval to realisation of this real estate in out legislation order of one of the proprietors.
Tendering makes the realisation in out legislation order organised by the close confidant, which is underlined in the contract or is nominated by mortgage holder.
Before tendering the close confidant notifies a body of justice, in which is registered by the pledge contract, and pledge maker of about default by the debtor of the obligation supplied with a pledge. The notice should contain name and residence of pledge maker and pledge holder, statement of the not executed obligation, total decoding of the basic obligation and those costs, which are subject to payment pledge maker before tenders, offer on repayment of debts within two months from the moment of reception of the notice, warning of an opportunity of tendering, name (name), residence (site) and telephone of the close confidant.
At unsatisfaction within two months of the requirements stated in the notice on default from obligations, the close confidant makes the notice on tendering, which besides the items of information stated above, should necessarily contain the name, description and brief characteristic of the real estate which is taken out on tenders time and a place of tendering. Further, one month prior to tendering, the close confidant publishes in a periodic seal the announcement of their realisation. 
In the announcement should be specified time and place of tendering, name and characteristic of the real estate, sum of a guarantee payment, exact site of the real estate, order and terms of payment of a purchase price, and also name, residence and telephone of the close confidant. The close confidant organises and will carry out tenders. In tenders have the right to take part any legal and physical persons, switching pledge maker and pledge holder, except for the close confidant.
The tenders can be announced not holding, if:
     - On tenders were less than two participants;
     - The person, who has gained tenders, has not brought in a purchase price.
On results of tendering and after payment of a purchase price the close confidant entrusts the purchaser the document on purchase of immovable property, which should contain the following items of information: the bases for tendering; a place and time of realization, name, description both characteristic of the acquired property and his site, names and residence mortgager, buyer and close confidant who is carrying out tenders.
The purchase of the incorporated property in the property mortgager is possible only if the tenders will be announced not holding on the mentioned above reasons.

The termination of the contract of a pledge
The pledge stops:
- With the termination of the obligation, supplied with a pledge;
- On demand mortgager at rough infringement pawnee of a duty on acceptance of the measures necessary for maintenance for safety of incorporated property, if these infringements create threat of loss or damage of a subject of a pledge;
- In case of destruction of a subject of a pledge on circumstances, on which pawnee does not respond, if mortgager the subject of a pledge has not restored for reasonable term or has not replaced it on equivalent;
- In case of sale from public tenders of a subject of a pledge;
- In case of the manipulation of a subject of a pledge in the property mortgager in the order established by the legislation.
At the termination of a pledge concerning the termination of the basic obligation or on demand mortgager (on the bases specified in the law) pawnee is obliged immediately to return a subject of a pledge mortgager. At mortgage of the real estate, in case of its termination on any basis, pawnee within 15 days is obliged to give out mortgager the written document showing of the termination mortgage, registered in a body, in which the contract was registered.

 THE CONTRACT ABOUT A PLEDGE

     ____________________ N ______ "____" __________ 19 ___.
     (Mountains., пос.)

     The parties:
     _______________________________________ ______________, called
     Further "Pawnee", submitted 
     On behalf of _______________________________________ _ on the one hand, and
     _______________________________________ __________________________
     Hereinafter referred to as "Mortgager" submitted
     On behalf of _______________________________________ ___ on the other hand
     The agreements about underwritten have achieved:

4     1. Right of the requirement

     1.1. According to the given contract and on its conditions, pawnee has the right, at default mortgager of the obligation, supplied with a pledge, to receive satisfaction from cost of the incorporated property.
     1.2. The right of a pledge provides the obligation mortgager under the credit contract from "____" _________ 19 ___ N ________
     _______________________________________ _____________________________
     (Statement of the obligation or link to items of the contract)
     1.3. Kind
Pledge _______________________________________ ________________
     1.4. Size and terms of the requirement.
     In total pledge provides the requirement pawnee in that volume, what it has to the moment of actual satisfaction, including the losses caused by delay of execution, penalty (penalty, interest), under the manipulation of collecting and other costs. 
     Term of execution mortgager obligations on contract from
"____" __________ 19 ____ of year for N ______ to ___________________
     And one preferential month, i.e. right of the requirement arises at pawnee ________________ 19 _____ of year.

     2. Subject of a pledge

     2.1. Name:
_______________________________________ ________________________
 Amount ______________ of units
     Total cost _______________________________________ _______
_______________________________________ ________________________
    (Balance, price of purchase, estimated and other - to specify)
     Place of a presence of property: ___________________________________
          (Other attributes - under the inventory of property, according to the application)
     The property right (right of complete economic conducting or operative management) is confirmed by the following documents:
     The items of information on the proprietors:
_______________________________________ _____________________________

     2.2. The contract of a pledge of the enterprises, belonging to the citizens, structures, buildings, structures, apartment (apartment house) or rent rights on them, is subject to the notaries certificate. Mortgage of the specified property, and also vehicles, is subject to obligatory registration in bodies conducting registration of such objects.
     At a pledge of the enterprises, belonging to the citizens, structures, buildings, structures of an apartment (apartment house) or rent rights on them, structure of a pledge is included also ground area, on which the specified property is located. To the purchaser specified pass all rights to the ground area.
     2.3. The realization of registration is assigned on mortgager with payment of the duty.
     2.4. The subject of a pledge will be ____________________ with the right of possession and (complete, partial) _________________ of usage.
     2.5. Pawnee has the right at any time to check up amount, kind both cost of the incorporated goods and conditions of his storage. 
     2.6. At default mortgager of conditions of the contract about a pledge pawnee have the right to require or transfer to it of the incorporated goods, or leave of the goods under the lock or seal pawnee, or prescheduled to collect the loan supplied with a pledge.

     3. Risk of casual destruction

     3.1. The risk of casual destruction of the incorporated property bears _____________
     _______________________________________ ______________________.
     (mortgager, clothing guarantor)
     3.2. Mortgager will carry out at own expense insurance of property, which remains in his usage.
     The insurance is made by the obliged person not below than rating specified in item 2.1. of the present contract.
     3.3. The insurance policy should be written out for the benefit of pawnee for the sum __________________ thousand tenge.
     The addressee of the rest of the sum of compensation is mortgager.
     3.4. Term of granting of the insurance policy ________________
     At do not performance of the policy mortgager the bank has the right to make insurance with reference of the charges on the obliged party.

     4. Remortgager

     The repeated pledge of the incorporated property mortgager is not supposed.

     5. Realization of the incorporated property

     5.1. Pawnee has the right, at default mortgager of the basic obligation, independently to realize property, taking place in a pledge, irrespective of, in whose possession and usage there is a subject of a pledge in the order determined by the Decree of the President of Republic of Kazakhstan, valid of the law, " About mortgage of the real estate ".
     5.2. Under the agreement of parties as close confidant on realization of the incorporated property is nominated ______________________________________
     The passport: a series ____________ N __________, living to the address:
     _______________________________________ ________________________
     5.3. Mortgager has no right to counteract in any form pawnee at acceptance them of measures under the manipulation of collecting.
    6. Occurrence of the right of a pledge

     The right of a pledge arises from the moment of the conclusion of the contract about a pledge, and if the contract is subject to registration - from the moment of his registration.

     7. Special conditions

     7.1. Reception and transfer of a subject of a pledge should be made with drawing up of the documents confirming their validity.
     7.2. Pawnee has the right to accept execution of the basic obligation supplied with a pledge, from the third person without the consent mortgager. In such case to the third person passes the right of a pledge under the given contract.
     7.3. At pledge pawnee has the right to use the incorporated property with the purpose of a covering of the charges on his contents.
     7.4. The rights and duties of the parties under the given contract can not be transferred to the third persons, if the contract does not stipulate other.
     7.5. The disputes following from the present contract are subject to consideration in courts.
     7.6. Is made in _______ copies.

     Legal addresses and properties of the parties:

Pawnee Mortgager 
The guarantee - as is the form of maintenance of return of the credit. In case of the guarantee the property responsibility for the borrower is carried, as a rule, by the third person. The guarantee is applied at mutual relation of bank, both with legal, and with the physical persons. With reference to the legal persons the guarantee is made out by the written contract between bank and guarantor certified notarially. 
Use this form maintenance reflexivity of the credit in conditions of market economy demands the careful analysis of credit status of the guarantor. By the guarantor the physical person having constant place of work can act,
The constant income or certain property. The guarantor responds before the creditor in same volume, as the debtor, including payment of interests, legal cost on collecting the debt and other losses of the creditors caused by default or inadequate execution of the obligation by the debtor, if other is not established by the contract of the guarantee.
To the guarantor, carried out the obligation, is passed by all rights of the creditor under this obligation and right belonging to the creditor, as pawnee, in that volume, in which the guarantor has satisfied the requirements of the creditor. The debtor, carried out the obligation should immediately notify on it the guarantor.
The guarantee stops:
- With the termination of the obligation, supplied with it;
- In case of application of this obligation attracting increase of the responsibility;
- In case of translation on other person of the debt, under the obligation, supplied with the guarantee;
- At approach of term of execution of the obligation, supplied with it, if the creditor has refused to accept appropriate execution;
- After expiry of the term, on which it is given.
The guarantee is a guarantee of the third party to extinguish a duty, in case of inability of the debtor to execute the obligations. As the subject of the guaranteed obligation the financial-steady enterprises, or special establishments having means, less often borrowers, banks can act.
In our country granting a guarantee one bank to another now is widely applied, at distribution by last of the credit to the client of the first bank. Such situation arises in connection with absence at bank of free resources, for granting the credit to the client, or if the distribution of the large sum of the credit will disturb liquidity of bank. At distribution of a guarantee the bank does not lose connection with the client, though does not finance it, and simultaneously has the certain income. With the purposes of prevention of risk liquidity of bank in connection with an opportunity of development to him of guarantee operations the Central bank has limited a total sum of given out guarantees, volume of his own means. The order of distribution of guarantees is adjusted by the working civil legislation of Republic. The guarantee is represented in written form, and is the obligation of one legal person to extinguish completely or partially debts under the loan and interests on it, legal and physical persons under the established form of the letter of guarantee. 
Guarantee represents the letter of guarantee to establishment of bank, in a place of a presence of the account, where it is stored before complete repayment of the loan. In bank of the borrower the copy letter of guarantee, with a mark of bank guarantee about acceptance of a guarantee is represented. The bank guarantee is represented in establishment of bank where a place of distribution of the loan. Writing off of means, in the indisputable order from the account guarantee, bank, served another establishment, and bank given out a guarantee, is made by the collection order of bank of the borrower. One of kinds of maintenance is the obligation guarantor’s to take up a part of the loan, after its distribution. This kind of maintenance is applied, if at bank the credit resources, after the expiration of the certain time are liberated, but not in the complete sum required to the borrower immediately, or if the credit resources, available at bank, should be used according to the available arrangement for distribution of the loan already beforehand to certain borrower a little bit later.    
Distinguish personal guarantees (guarantee of the separate members of company), corporate (guarantee of the head company concerning its branches), state (guarantee of government agencies under the bank loans to firms).
The concession of the requirements (concession) is a document of the borrower (mortgager), in which it concedes the requirement (debit debts), creditor (bank) as maintenance of return of the credit. The contract about concession provides transition to bank of the right of reception of money resources under the conceded requirement. Cost of the conceded requirement should be sufficient what to extinguish loan debts. In practice is used open and silent concession. Open concession assumes the message to the debtor (buyer mortgager) about concession of the requirement. In this case debtor repays the obligation to bank, instead of borrower of bank.   
At silent concession the bank does not inform the third person concession of the requirement, the debtor pays mortgager, and that is obliged to transfer received to the bank. The borrowers prefer silent concession what to not undermine the authority. But for bank silent concession is connected to the large risk, as the means under the conceded requirements quite often act on the accounts of the borrowers who are taking place in other banks, as the borrower has the right to concede the requirements some times, including any more not existing requirements.

Insurance of credit risk.
In conditions formation of the market relations, in economy of Kazakhstan and creation of the new enterprises based on different patterns of ownership, which have no the sufficient capital what always to guarantee execution of the obligations before bank in a part of repayment of the loans, in 1990 the form, new to Kazakhstan, of maintenance of a reflexivity of the loans - insurance of the responsibility of the borrower for do not lend of the loans was entered into practice. The insurance of the loans is carried out according to the law on insurance in Republic. According to the established body of insurance by the order the borrower concludes with insurance the contract

2.3 Procedure both mode of distribution and repayment of the credits.

The granting of the credits is carried out by banks having the official status, which is defined by the sanction of National bank of Kazakhstan. On opening of bank and presence of the license on realization of bank operations the Crediting is made according to the laws of Republic On National bank of Republic of Kazakhstan "," About Banks and Bank activity in Republic of Kazakhstan ". The bank loans in the priority order should be given on the purpose and measures connected with by increase of a production efficiency, it scientifically of technological level. All questions connected to planning, distribution and repayment of the loan, reduction or increase of the interest rates, the borrowers decide in served banks on the basis of the credit contract determining the mutual obligations and the responsibility of the parties. 
The banks are obliged to give out the loans for crediting at a rate of free resources, available at them, within the limits of the planned size, which is defined by bank together with the borrower on the basis of study of need with accumulation of material stocks. At crediting are arranged on prevention of unreasonable growth goods of material assets and expenses, strengthening of settlement, financial and credit discipline.   
The loans, as a rule, are given to the solvent and capable borrowers, irrespective of their patterns of ownership, at absence before the delayed debts under the earlier given loans. On occasions under the decision of the chief of bank the loan can be given and at presence of the delayed debts, if it does not carry long character and can be extinguished in a near future.
Questions of organization especially carefully should be considered
The credit relation with the borrowers having low profitability, unstable financial status, the distribution of the loans with which is connected to the raised risk for bank. The distribution to such borrowers of the loans caused by necessity of satisfaction of social and economic needs of concrete region, can be decided by bank after the careful individual approach under the proved petitions of bodies of authority or higher parts, only at reception of a guarantee on return of these loans.
Basic element in system of bank crediting are the methods of crediting, as they define a number of other elements of this system, such, as a kind of the loan account, way of regulation of loan debts, forms and order of the control behind target use of extra means and their duly return. Hence, it is necessary to understand methods of crediting ways of distribution and repayment of the credit according to principles of crediting. In after reform the period the domestic bank practice produced two methods of crediting, on the rest and on a revolution. The essence first consists that the movement of the credit (its distribution and repayment) co-ordinated with movement of the rest of financed values. The growth over normative stocks caused need for the credit, and their decrease has required its repayment in the appropriate part. The feature of a method of crediting on a revolution was that the movement of the credit was determined by a revolution of material assets, that is their receipt and expenditure. The repayment of the credit was carried out after end complete circuits of means that the borrower according to the plan of realization. Concerning new commercial structures, that is subjects of other patterns of ownership, at distribution of the loans the commercial banks use other methods of crediting, leaning on available foreign experience. The essence of the first method is that the question on granting the loan is decided each time in the individual order. This method is applied by granting the loans on concrete terms.
At the second method of the loan it are given in limits beforehand of limit, established by bank, which is used by it in process of need, by payment of the payment documents, showed to it during the certain period. Such form of granting of the credit refers to as opening of the demand line of credit. The open demand of credit allows paying at the expense of the credit any calculation-money documents stipulated in the credit agreement, concluded between the client and bank. During term of the demand line of credit the client can at any moment receive the loan without additional negotiation with bank and what or design. 
The distribution of the loans to the clients is carried out from the separate loan obverse accounts depending on a target direction of the loan. The special loan accounts, as a rule, open to the borrowers testing constant need for the bank credit, when by the credit mediocre the most part of a payment revolution of an economic body. Use of the special loan account for granting the credit assumes a direction of the proceeds from realization of the goods on credit of this account for duly repayment of the credit and maintenance of complete participation of own means in reproduction process. Thus, under the special loan account go of regular distribution of the credit and repayment. To the enterprise one loan special account can be open only. But it does not exclude an opportunity of opening to it of the in parallel simple loan accounts, if the bank will consider necessary credit ь at the enterprise separately what or goods, expense, measure. The simple loan accounts are used in bank practice mainly for distribution of the single loans. To the enterprise some simple loan accounts at once can be open. If it simultaneously uses the credit under some objects and therefore, the loans are given out on different conditions, on different terms and under unequal interests Such detached account of the loans matters for realization of the bank control behind their duly repayment by the borrower.
The crediting of the borrower begins with granting by the borrower of a package of the documents:
- Feasibility report of a financed measure. By development of the feasibility report the applicant takes up the responsibility for completeness both reliability of the given data and accounts. For all initial given and settlement sizes the sources of their reception should be specified. The deliberate distortion by the client of the given data can be the basis for the termination of examination and rejection of the project;
- Copy of the contracts, contracts, agreements with all applications to them; 
- Accounting reporting, report on profits and losses, declaration on the incomes and others given for definition of a financial status and credit status of the client for the certain period;
- Application for granting of the loan;
- Item of information on movement ТМC, urgent obligations;
- Credit contract, information on maintenance and business the plan.  
To the borrowers having the constant credit relations with bank, good at him reputation, the list of the given documents for crediting can be reduced by bank. If necessary bank can require the conclusion auditor’s company about financial economic activity of the borrower, name of banks, in which the settlement and loan accounts, size of available loan debts with the indication of classification of the loan in their loan portfolio, and as the obligations on maintenance of duly return of the credit under the forms accepted in bank practice are open. The credit department of bank heads all work connected to preparation and passage of the documents on crediting, co-ordinates work of other services connected with crediting and responds for efficiency and reliability of the items of information, given by the borrower. 
The credit workers together with the experts legal men of a legal department study legal businesses of the clients for definition of their legal status and powers. The contracts are carefully studied, and their legal rating on basic conditions of deliveries, terms, currency of payment is given, to the forms of accounts and is found out, whether the necessary legal requirements on them are observed.
The legal service of bank provides legal support by consideration of the application on reception of the credit, at the conclusion of the credit agreement, contract of a pledge, at realization of the incorporated property. In those cases when distribution of the loan, on what or reasons becomes impossible, about it the written motivated conclusion is made and the credit committee is transferred to consideration to the chief of bank or on a joint body of bank. The conclusion of a credit department and other services of bank are the basis for removal of a question about granting the credit, on consideration of a credit commission or governments of bank.
At removal of the positive decision, the legal service prepares the contract about a pledge, and the credit department - credit contract, which then subscribes by the chief of bank. According to the order of distribution and repayment of the credit stipulated in the credit contract, the credit department makes out the order on distribution of the credit. At distribution of the loan for the first time to addressed borrower, bank it is necessary to make sure, that in the charter of the given borrower the right of his management is stipulated, to conclude of Goth of a name of the managing subject the economic contracts.
   The loans are given, as a rule, in the non-cash order. However if necessary under the decision of bank, for accounts with the citizens, attacks by granting the consumer credit, the loans can be given out by cash money.
 	 During crediting the banks are obliged to carry out the regular control of maintenance of the loans, status of actual stocks and expenses, change debit and creditor debts of the borrower. At presence in bank of the items of information about decrease of the rests of stocks and expenses without the appropriate repayment of the bank loans and change of creditor debts, the bank should carry out check of maintenance of the credit at the borrower on the data of book keeping or in a nature. The check of maintenance is made in the obligatory order, for the certain dates on the data of balance.
The order, terms and the ways of repayment of debts under the loans are provided in the credit contract. Concrete terms of return by the borrower of the loans, are made out by the urgent obligations in those numbers, in which according to account of need of the loans, the decrease of loan debts proceeding from actually usual to the beginning of the period is provided. 
During crediting under set of stocks ТМC and expenses under the simple loan account the proceeds from realization of production and the other money receipts are enlisted on the settlement account, and the repayment of the loans with settlement can be made daily or in other terms under the credit contract:
- By independent transfer by bank with settlement on the loan account free of the rest of the money resources which have stayed after fulfilment of prime and other payments; 
- By collecting in the indisputable order from the settlement account of the borrower of debts under the loans; 
- By prescheduled collecting under the order of bank, at revealing poor debts under the loans.
The repayment of the basic debt and interests on it is made by the payment order of the borrower. In case of it not granting of the order, the bank has the right to collect from the account guarantee by the collection order. In case of repayment of the loan lumps in the large sum in the credit contract the opportunity of reservation by the borrower on the separate account under the account deposits of means in the complete or partial sum of forthcoming repayment of the loan can be provided before its term, on conditions under the agreement of parties. 
At occurrence at the borrower of temporary financial difficulties, borrower the delay of repayment of the loan for the term of no more than 6 months under raised interest can be given, that is provided in the credit contract. The debts under the loan are taken out on the account of the delayed loans, if at maturity under the loan there are no means on the settlement account. To prescheduled repayment can be showed and urgent obligations with the stepped terms of payments, if bank by the creditor will be, the infringements in a storage, account or not target use of the received credit are revealed.
 	 In case of absence at the borrower of real prospect of repayment of the debts, not supplied with return, under the loan and interests on it bank the creditor:
- Shows the sum of the debt to collecting by the order in the indisputable order from the account guarantee or the guarantor without the prior notification - is received by satisfaction from cost of the property, incorporated by the borrower, in the order determined by the credit contract;
- Shows for payment requirements and accounts of the borrower to other person, which - the borrower has conceded for the benefit of bank, and as collects from the settlement account of the borrower the penalties and penalty stipulated in the credit contract. 

The size of a payment for usage by the loan is established depending on term of usage or risk of insolvency of the borrower; payment for credit resources; character and reliability of the given maintenance; rate refinancing of National bank; rates of competing banks and other factors with such account, what the sum of the interests received from the borrower, of a coverlet the charges of bank on attraction of means necessary for granting of the required loans, expenses for conducting bank business, and as reception of the appropriate income and profits.
The credit department of bank should carry out the regular control by performance of conditions of the made credit contracts, effective utilisation by the borrower of the received loans, duly and their complete return, thus supporting close contact to the borrower during all term of usage by the loan. In these purposes the regular analysis of economic activity of the borrowers of their financial position is carried out. Thus all kinds of financial and other information are used. The credit workers systematise the information received at registration of the loans and the control of their movement in special credit businesses of the borrowers, accumulate various financial and economic parameters, analyses of the forecasts and prospects of the borrowers.
In relation to the borrowers who are not carrying out the obligations in cases if it puts under threat duly and complete repayment of debts under the loans, and as at revealing cases of unauthenticity of the reporting the following measures of influence are accepted:
-	Warn the borrower about the termination of the further crediting, if in agreed periods the recommendations of banks - will not be executed stop the further distribution of the loans, stipulated by the contracts;
- In case of non-payment of the next payments in repayment of the loan and hopelessness of their duly return further show to collecting all sum of the loans, received by the borrowers, - at revealing the factors not of target use of the loans, collect the wrongfully used loans with ' by collection of the raised interest rate, reduce volume of the loans or completely stop the further crediting of a measure under the credit contract - at presence of the delayed debts under the loans the new loans are not given out, and at the borrowers financed on the special loan accounts the acting proceeds are directed on repayment of the delayed debts under the loans.
In case of suspension of activity of the borrower, and as at involving it in, judicial process, in which the sum of the claim makes essential size in relation to the sum of its own turnaround means, the bank stops distribution of the new loans, and considers a question on necessity of prescheduled collecting before the given loans. After repayment of the delayed debts under the loans the question on renewal of distribution of the loans to the borrower can be decided positively under condition of elimination of the reasons caused formation of the delayed debts. Concerning the borrower who is not carrying out of the obligations on duly return of the received loans, the bank can address with the petition to court about excitation of business about the announcement by its insolvent in conformity, with the Law of Republic of Kazakhstan " About bankruptcy ". At liquidation of the borrower, the right of continuity does not occur, and the bank is obliged according to the Civil legislation and Law " About bankruptcy ", to demand to a liquidating commission about repayment of loan debts.

2.4 Credit contract - basis of credit mutual relation of bank with borrower.

The banks and economic bodies in the credit market enter the contractual relations, as the creditors and borrowers. They make out credit contract, which is by a basis of mutual relation of bank with borrowers of the relation between the creditor and borrower, their connection with each other, are mutual relation of two subjects of reproduction, which act in first, as the independent legal persons, in second as providing mutual economic interest to each other. Therefore it is possible to tell, that the credit contract concerns to a type of the economic contracts. Feature of the contractual relations in sphere of the credit is that the same subject can act simultaneously both as the creditor and as the borrower. 
The application of the credit contracts in a national economy was stipulated in the first normative document of the State Bank in 1921. But, since 30 years with transition to the centralised control system of a national economy, and accordingly and credit, the relation between the creditor and borrower were not made out by the contract. In it there was no necessity, as the granting of the credit to a facilities in conditions of the distributive attitudes was strictly regulated, is detailed and scheduled in the normative and instructive bank documents. Besides through the ministries and departments were lowered limits of crediting to each concrete borrower under concrete maintenance proceeding from the centralized credit plan. Only since 1988 the bank system has returned to practice of the conclusion of the contracts with householders. It was caused by transition, both all branches of a economy, and most bank system on self-financing.
The credit contracts were by the form become and development the partner relation between banks and economy, means of influence for more effective utilization of extra means, strengthening by credit and increase of general payment discipline in a economy of the country. At the same time they were not true legal, legal documents, both under the form, and under the contents. They included in the basic economic obligations of both parties, while the economic contract is the bargain not only equally responsible, but also equal in rights subjects, in second in them did not contain of the unit of the sanction, providing an opportunity, of the arisen disputes and disagreements. In practice the liability for infringement of conditions of the contract admitted, as a rule, only on the part of the client of the borrower.    
The orientation to market conditions of managing, acceptance in 1990 of the laws about the enterprises and enterprise activity, property, banks and bank activity has allowed to proceed to development of the credit relations with a economy on the basis of the high-grade, legal, competent credit contracts. The modern credit contract, as a rule contains the following sections:
- General provisions;
- Right and duty of the parties;
- Responsibility of the parties;
- Order of the resolution of disputes;
- Validity of the contract;
- Legal addresses of the parties. 

In the first section of the credit contract it are specified:
- Name of the contracting parties;
- Subject of the contract;
- Kind of the credit its sum, term, interest rate;
- Condition of maintenance, execution of the obligations under the credit;
- Order of distribution and repayment of the credit. 

Features of each concrete business deal, situation in the market of credit resources define the rights both duties of the borrower and creditor follow from the current legislation, and as, credit status of the borrower.
So in particular enterprise the borrower can provide for itself the following rights in the credit contract, to demand of bank of granting of the credit in volumes and in terms stipulated by the credit contract, to address to bank with necessary, proved accounts for modification in conditions of the contract, prescheduled to extinguish debts under the loan, to terminate the contract at non-observance by bank of its conditions or on the economic reasons, to require prolongation of term of the contract for the objective reasons.
The bank has the right to make check of maintenance of the given credit including on a place (at the borrower) and target use of the credit, to stop distribution of the new loans and to show to collecting earlier given at infringement by the borrower of conditions of the contract, and as at revealing cases of unauthenticity of the reporting, fail in book keeping, numerous delay of payment of interests for the credit to raise from the borrower at prolongation of the credit the appropriate commission to reconsider in the unilateral order of the interest rates for usage by the credit in case of change of a level of the interest rate CBR, norm of obligatory reserves deport by commercial banks in CBR, to make charge and collecting of indemnification for the unused credit (in case of official failure of the borrower of the credit or his part during validity of the contract). The borrower undertakes:
- To use the given credit for the purposes stipulated by the credit contract;
- To return the given credit in terms under the credit contract;
- It is duly to pay to bank interests on credit;
- It is duly to give balance and other documents necessary for bank for realization of the control of the loan;
- To ensure reliability given in a databank for reception of the credit and subsequent control, behind its use; 
- To give the creditor access to the primary accounting and accounting documents on its requirement on questions concerning of the given credit;
- Beforehand to inform bank on forthcoming change organise of the legal form or other reorganization - by reorganization or liquidation immediately to extinguish debts under the credit with complete payment of interests irrespective of contractual term of repayment of the credit.

The bank undertakes:
- To give the credit to the borrower in volumes and in terms under the contract - to inform the borrower on the facts and reasons of prescheduled collecting by bank of the credit;
- Monthly in the certain term to charge interests for the given credit;
- To inform the borrower on changes in the normative documents on crediting and accounts which are brought in on the decision CBR, bodies of authority and management.

For infringement in the credit contract in 4 section the responsibility of the parties, including property is provided. The bank for infringement by the borrower of the obligations, taken on, can stop the further distribution of the credit, show it to prescheduled collecting, reduce the sum of the credit, stipulated on the contract, to increase the interest rate on it. The borrower can require of bank of the indemnification arisen owing to not granting to it absolutely or not in complete volume of the credit, stipulated on the contract. At the same time borrower pays for incomplete use of the credit the penalty at a rate of a payment of bank for the involved resources and half-received margin in the accounting period. At all it  is necessary to mean, that the inevitability of punishment for default taken  itself of the obligations does not mean, that the subjects of credit mutual relation have no the right on mutual privileges and encouragement’s on conditions of his(its) performance. 
The contents of the credit contract can be a little bit other, if the speech goes about the concrete credit, credit given out under condition of formation by the potential borrower in the certain sum urgent on deposit or on conditions of purchase by it at bank financial future, opening of the demand line of credit, granting clearly of the credit, which should reflect specificity of its registration and uses. As additional conditions to the credit contract the requirements of bank to the borrower can act, for example: without the consent before repayment of the credit under the given contract to not lend to not act guarantor till the obligations of the third persons, attacks by the endorsee or guarantor, to not sell and to not transfer in any pattern of ownership of the actives, and as to not transfer them in a pledge as maintenance under the loans of other creditors, to not suppose merge or consolidation with other enterprises. In any bank the conclusion of the credit contracts passes some stages:
- Formation of the contents of the credit contract by the borrower (kind of the credit, sum, term, maintenance);
- Consideration by bank of the project, submitted by the client, of the credit contract and drawing up of the conclusion about an opportunity of granting of the credit in general and about conditions of his granting in particular (at the positive decision of a question).
At this stage the banks define credit status of the potential borrowers, opportunities to give the credit to economic bodies in the sums, required by them, proceeding from available credit resources, opportunities of their increase at the expense of deposit and percentage policy, attraction of the interbank credits. The joint updating of the credit contract is made up to achievement of mutually acceptable variant and performance it on consideration of the lawyers. Signing of the credit contract by both parties, that is giving to it of force of the legal document. The signing of the credit contract is followed with granting an economic body of the credit in target dates and in volume stipulated in the contract, and then subsequent control of bank of observance of conditions of the credit contract, but mainly behind duly return of the given credit.

2.5 Prospect of development of credit operations in
Banks of the second level

One of the basic prospects of development of the credit relations between banks and population in our Republic is the expansion of sphere of the consumer credit. In credit practice of Kazakhstan and other countries of CIS the subjects of crediting are, in the basic legal persons. The reception of the credits by the physical persons for satisfaction of the personal and family needs is one of the most widespread kinds of bank operations in the advanced countries of West, is especial in USA.
For the period 70 years in USA the triple growth of the rests under the consumer credit was observed, and to the beginning 90 years it exceeded the sum of 600 billions dollars. In Germany per 70 years the five-multiple growth of the consumer credit was observed. The consumer credit has received such wide circulation in world bank practice because it sharply expands capacity of the market on all spectrum of consumer goods and real estate. The sphere of action of the consumer credit is wide, it not only purchase of the durable goods. Interpretation
The consumer credit includes:
- The purchase of the goods and services for the current usage (here is possible is to related payment for training, by treatment etc.);
- Purchase of the real estate by instalments, that is one of versions of long-term consumer crediting. 

Such long-term crediting for purchase of habitation requires young entered in a marriage. Such credit, certainly, should be preferential in what that of a degree, as well as credit for payment of training. In our advertising newspapers there is a weight of the announcements about sale of comfortable apartments in new houses. But is felt, that the problem of limitation of demand caused just by absence of an opportunity of effective instalment sale takes place. This is concerns not only housing construction, but also those trade organizations, which realize enough expensive import consumer goods, household and office equipment.
The market of the consumer credit for today is rather narrow and is focused on high income of group of the population. When that Saving Bank was monopolist in the market of the consumer credit, but having confronted with a high degree not of return, almost has stopped this activity. For this reason the consumer credit, such simple on technology and extremely urgent, has not received serious development.   
The risk not of return is a basic problem interfering its development. For elimination of risk not of return the sole, objective condition is necessary is a normalization both stability political and economic situation of the country and precise observance of the economic legislation.
The economic stability is important from that point of view, that it deviates mutual trust of the creditor and borrower. At the bargains of consumer crediting both for the creditor and for the borrower the predictability of other party, reliance of a long-term financial solvency each other is important. The bank the creditor is guided by a level of wages or other incomes of the borrower and for him important, that this level would provide a covering of the credit and would be kept for all period of crediting. Precisely as also borrower should be sure in financial stability of bank, as factor of performance by him of the obligations. Therefore in the countries with steady economy and by a high level of life the consumer credit is focused on all layers of the population. Their average level of life quite provides a financial solvency of the borrower.
Now, when in Kazakhstan the general economic and political stability was designated, the necessary preconditions for development of the consumer credit, and these preconditions in the further expansion and development of the market of consumer goods, services and real estate have appeared.
Other prospect of development of credit operations of banks of the second level is crediting small and average business. The program of crediting of small business in Kazakhstan is carried out on a line of the European Bank of Reconstruction and Development since March 1998 and more easy approach to credit resources is aimed at granting to small business. And not only small private enterprises, but also businessmen without formation of the legal person. Government of Republic of Kazakhstan and ЕBRR has agreed upon the auxiliary loan on development of small and average business under a guarantee of Republic of Kazakhstan. The agent of Government on attraction of the loan is ZАО " the Fund of development of small business ". The total sum of the loan makes of 77,5 millions US dollars, from which 72,5 millions are intended directly on crediting of the subjects of small and average business, and 5 millions on payment of the advisers from ЕBRR, on organization of the technical help and training of the credit experts. The realization of the program of crediting МSB has by the basic purpose expansion and increase of competitiveness of private sector of Republic of Kazakhstan. The program provides the credits for updating of a working capital, purchase of raw material, purchase of the industrial equipment, rooms, vehicle, and as on repair of rooms and financing of construction. Thus the borrowers have no the right to use means from the loan on the following activity:
- Manufacture or trade in the military equipment;
- Manufacture or trade in furs or dying out kinds of fauna;
- Manufacture of tobacco and spirits;
- Casino;
- Gamble by currency; 
- On activity negatively influencing on ecological conditions in the country.

The extra means for development МSB are placed through banks of the second level. ОАО " The National Bank of Kazakhstan " is one of conducting in realization of this program. On March 1, 2000 the sum of the means, attracted with its has made of 3250 million US dollars. 60 % of means are already placed through much numerical regional branches of National bank.
To perspective the operations of crediting of the population with use of bank cards concern. The debit card allows its holder to carry out settlement operations under the account. It is as though mean for the removed access to the account. Use of a credit card enables its holder to carry out settlement operations not only at the expense of own means, but also at the expense of the emitter, received from bank, of the credit. The credit card represents as a mean for the removed reception of credit bank services.
The crediting through credit cards sharply will increase number of the individual borrowers, many of which are interested in the credits within the limits of wages. The rendering of such services to the population is urgent even for the following reasons:
- The market of crediting of the physical persons is mastered by banks while insufficiently, and life requires increase of its capacity;
- It is more reliable to banks to give out set of the fine loans, than one large. 

Essential task of banks is the maintenance mass issue of credit cards at preservation of the individual approach to each borrower.
On turn the commercial Internet the credits most remote, but inevitable prospect. Under the forecasts of Western advisers in a near future the Internet the business becomes one of perspective directions of enterprise activity. One of the newest bank technologies becomes granting by banks of the commercial credits through the Internet. 
Now bank sector of a world net the Internet studies opportunities for the automated registration corporate and syndicating of the credits. Practically it is supposed to be carried out with the help of auctions, on which corporations or the syndicates of the enterprises will expose the specifications under the credits, necessary for them, and banks - to take part in Tenders for the right of allocation of such credits. Such electronic tenders through the Internet were not included yet in practice, but the market is a strengthened push bank to use of such system. What can give such auctions to banks? Use of the Internet considerably will reduce terms of registration of the credit. On registration of the commercial credit usually there leave days and weeks, numerous telephone negotiation, message by fax and email, huge volume writing work - all this detains distribution of the credit. The electronic credit auctions will allow the companies to receive the credits immediately.
The Internet gives not only temporary reductions, but also financial. The operational charges will considerably be reduced, the reduction of the charges on payment of the personnel, hence, will take place the personnel will decrease also. The amount of the participants of electronic auction considerably will exceed their number that will promote a level of increase liquidity. The banks of average size can receive access to earlier not accessible for them to the large clients from number transnational of the companies. Will disappear need for credit divisions, as the credit agreements and credit mutual relation can be analyzed through the Internet. Placing the data on the credits in the Internet, the banks transform the credits into the goods. The automated system of accommodation of the credits and needs for them will result that the number of the workers of banks should sharply be reduced, but their qualification will appreciably be raised.

THE CHAPTER 3. THE ANALYSIS of WORKING PRACTICE of CREDIT MUTUAL RELATION ZАО "BANKCENTRECREDIT" With.
3.1 Closed joint-stock company "The Bank Centre Credit "

The basic kind of activity given ZАО is a bank activity. A kind of the property - private. There are working licenses: 
- National bank RК on realization of bank operations in tenge and foreign currency from September 18, 1998, №48; 
- National commission RК on valuable papers on the right of realization of broker and dealer activity with state valuable papers RК from June 17, 1996 № 2030043.  
- National commission RК on valuable papers on employment custody by activity in the market of valuable papers from June 18 1999г. № 0407100043.

ZАО " The Bank Centre Credit"
One of the largest, stable and most dynamical banks of Kazakhstan, - has brought in the significant contribution to improvement of procedures of crediting, management of actives and passives, and also system of information technologies of the emitter.
With the purposes of diversification of the sources of financing ZАО " T Bank Centre Credit  " conducts purposeful politics of decrease of a share of attraction of means on a home market at increase of densities drain from the international financial institutions as syndicating of the loans, demand lines of credit, that the coming years will be the steady tendency.
Follows strategy of purchase of the status of the international financial institutions and conducting supplier of bank services through individual accommodation in the international market of the actions. 
At the same time has received international syndicating the loan at a rate of $ 10 bln. With initial validity 16 months also is successfully extinguished in January 2000 after double prolongation.
Developing the achieved success, ZАО " The Bank Centre Credit" began realization of the programs aimed at strengthening of the base of involved means, which will give bank an opportunity differences bank tools used for financing of foreign trade, and to keep positions in financing trade operations on import and export. 
By December 1997 total amount of demand lines of credit connected to trade financing, in comparison with 1996 has increased on 33 % and to achieve $12,5 bln.
Despite of crisis, November 29, 1998 was extinguished syndicating the loan and the rate is paid in time.
Within 1997 the bank has mastered the agricultural loan of the Asian Bank of Development, is credited of the Kazakhstan manufacturers of agricultural production for the sum $ 2 bln. 
" The BankCentreCredit " became the borrower of the German state company on development of business and investments Deutsche Investigations and Entwicklungsgesellschaft mbh (DEG), having signed the credit agreements for the sum 1.000.000 DM for the period of 6 years for investment in private sector of economy.
On a home market the bank will carry out aggressive policy directed on constant expansion of sphere to activity. Existing growth of client base and occurrence of new opportunities in those sectors of economy, which, in opinion of the experts of bank, have the best prospects of growth: the petroleum and gas, transport and telecommunications, food branch, power, agriculture favourable has an effect for a rule of bank.
The bank serves the large and average Kazakhstan industrial enterprises, private persons with the high incomes and multinational companies working in territory of republic, and avoids crediting of problem sectors of economy, where there is a high level of credit risk.
At the expense of expansion of crediting of perspective branches in 1997 in comparison with 1996 the average loan portfolio of bank has grown on 54,3 % (55 % from the sum of actives), and the basic share is made by(with) the credits in currency (59,1 %). 
The growth of an average loan portfolio of bank in 1998 rather 1997 has made 116 % (on the data auditor - 84 %). On a background of common increase of a loan portfolio on 48 % the loans in tenge have decreased. The structure of served branches includes (in brackets the comparative data for 1997):
- Agriculture - 12 % (9 %);
- Mineral industry and metallurgy - 9 % (12 %);
- Trade - 14 % (29 %);
- Financial sector - 5 % (0,2 %);
- Hotel business - 2 % (3 %);
- Power - 4 % (3 %);
- Chemical industry - 0,2 % (2 %);
- Mechanical engineering - 1 % (1 %);
- Building materials - 0.5 % (0,4 %);
- Food-processing industry - 6 % (4 %);
- Health services - 0,8 % (1 %);
- Transport and communications - 31 % (8 %);
- Petrol and gas industry  - 6 % (12 %);
- Other - 9 % (14 %).

Total amount of the investments of bank in the capital of other legal persons in 1998 has made 503,3 bln. tenge, in 1997 - 346,1 bln. tenge. But also is known as the operators in the local market of financial tools - in currency sector (primary market and an outside exchange of the interbank market on operations with US dollars), sector of short interbank crediting (from the sum of actives), and also in the market of the state liabilities (share on a home market). 
In 1998 operations with state papers in the external market - for the first time were carried out $ 200.0000 are bought euro share of the Ministry of the finance of republic for the sum.
The bank was repeatedly attracted with the large companies as the adviser for a number of the major projects, is the adviser for reconstruction and privatization petrol and gas of the industry, and also renders consulting services in process of a privatization in mining, metallurgical, telecommunication, transport and power sectors of an industry.
By the beginning of 1998 branch the network ZАО "The Bank Centre Credit " consist of branches: 
The name of branch (РКО)
1. АГФ. Аlmaty
2. РКО № 1,. Аlmaty 
3. РКО № 2,. Аlmaty 
4. РКО № 3,. Аlmaty 
5. РКО № 4,. Аlmaty 
6. РКО № 5,. Аlmaty
7. РКО № 6,. Аlmaty 
8. РКО № 7,. Аlmaty
9. РКО № 8,. Аlmaty
10. РКО № 9,. Каskelen
11.. Акtau
12. РКО in one @. Акtau
13.. Акtobe
14.. Аstana
15. РКО № 1,. Аstana
16. РКО № 2,. Аstana
17. РКО № 3,. Аstana
18.. Аtyrau
19. РКО № 1,  Кulsary
20. РКО № 2,  Теngiz
21.. Zhezkazgan
22. РКО№12,. Zhezkazgan
23. РКО №13,. Zhezkazgan
24. РКО № 14,. Zhezkazgan
25. РКО in one @. Satpaev
26.. Karaganda
27. РКО № 1,. Karaganda
28. РКО № 2,. Темirtau
29.. Кокshetau
30. РКО in one @. Shuschinsk
31.. Коstanai
32. РКО in one @. Коstanai
33.. Kizil Orda
34.. Pavlodar
35.. Petropavlovsk
36. РКО in one @. Petropavlovsk 
37.. Rudniy
38. РКО in one @.Rudniy
39.. Families
40.. Таldicorgan
41.. Таraz
42.. Uralsk
43. РКО in one @. Акsai
44.. Ust-Камеmogorsk
45. РКО in one @. Ziranovsk
46.. Shymkent
47. РКО in Акsukent
With the purposes of realization of negotiation and maintenance of the official contracts with banks, international financial institutions, bodies of authority and management, and also assistance in development of the international client and partner network of bank it is accepted the decision on opening of representation in other states. 
According to submitted on KASE to the financial documents, since 1995 the activity of bank is break-even.
On extraordinary General meeting, which was held on January 25, 1999, the shareholders have accepted the decision on change of the size of the authorised capital of bank by its increase on 57.660.610 tenge at the expense of a part of the pure income (in view of preservation of a share of each shareholder), and also his currency and structure. 

3.2. Analysis of working practice of credit mutual relation
ZАО " The BankCentreCredit " with borrows.

The working practice of credit mutual relation ZАО " The BankCentreCredit" with borrows is carried out on given financed by bank of the project of the company "FoodMaster". The given company is engaged in processing both manufacture milk of production and object of the credit in the given project is the creation of an industrial complex on manufacturing ice-cream in city Аlmaty. The work of bank with the borrower passes the following stages:
1.. Registration and primary selection of investment intentions.
2. Examination of the project.
3. Acceptance of the decision about financing.
4. Financing the project.
5. Control of realization of the project.
6. Registration and primary selection of investment intentions.
On the initial stage of work with the potential borrower, in administrative department the Letter - application from borrow has acted.
The letter - application is transferred to the First Vice-president of Government for a direction to the Director of the appropriate department of Crediting, Chief of a Security, Director Legal
Department and in department of Exchequer for the further work with the project.
The nominated manager under the project has met the client, explaining the order of consideration of the application, and has requested the documents for preparation of the preliminary conclusion and rating of the project on conformity of credit policy of bank. Spending the preliminary co-ordination of the sum of the credit is analyzed as an opportunity of research of external and internal sources of financing. By results of meetings, the credit application was made, in which have found reflection the following data:
· The name of the borrower; 
· The legal address; 
· Average list structure;
· Serving banks; 
· The actual address; 
· The contact telephone; 
· A fax; 
· The sum of the required credit; 
· Term of the credit; 
· A special-purpose designation; 
· Offered maintenance. 
All set forth above data make sure by a seal both signatures of the first chief and chief accountant of the enterprise.
In case of a negative rating, manager of the project the answer to the client with a statement of all reasons a rejection of the application on financing prepares.
In this case there was a positive rating and the registration form of the credit application was filled. The decision on an opportunity of financing is prepared, and the brief conclusion, reserved by the First assistant is returned in Department of Crediting and for conducting the further work under the project the credit file is open. The packages of the documents and registration form are in duplicate directed on examination.

2. Examination of the project.
Examination of a Security.
The security (SB) was engaged in work on reception of the additional information, by results of which the conclusion behind the signature of the Chief SB was prepared, in which proved to be true:
- Legal address and properties of the client;
- Authenticity of the submitted documents;
- The analysis of business reputation of firm (information contains was going in business circles) and its chiefs (information on a previous conviction in the past);
- The absence of the delayed debts was defined;
By results of examination is made by the summary saying about absence of materials interfering consideration of the given project, owning consideration, committee.

Examination of Legal department.     
Institutional a rating:
Experience of foreign trade activities: the documents were not given.
Sources of currency means: the foreign partners are not present; the other participants of the project: general supplier and other suppliers. The executor of the project: the company "FoodMaster".
Kind of the property: private.
- The date of registration is determined;
- Number of the certificate about registration is determined;
- Size of the authorized capital;
- Address, chief, chief accountant. 
Presence of the sanction on output, in the cases, stipulated by the legislation: the license GSL № ******** for realization processing and manufacture milk of production in territory RК.

Commercial rating.
- Procedure of payments for raw material and materials: Теnge of Republic of Kazakhstan
Ecological rating.
Conformity to norms and instructions of the legislation on protection of an environment: manufacture of ice cream does not concern to chemical "dirty" manufactures and does not require special measures on ecology.

The acts tax and auditor’s of checks: the Information of Tax Committee on Zhetisuiskai to area of Is submitted. Аlmaty. The debt on payments in the budget is absent.

Examination of Department of Exchequer. 
The interest rate was determined at a rate of 10 % annual; term of granting of the credit - 1 year;
 	 Size and currency of the credit - 100000 (hundred thousand) US dollars.
The influence will not affect performance prejudinsy of the specifications - Distribution of the credit on performance prejudinsy  of the specifications.
The diagram of payments under the credit - was defined depending on search.
                
Examination of Department of Crediting.
The preliminary information. The basis for examination is of the project.
The information on the applicant of the project, date of application, number of the letter.
The government’s order under a project.

The initial documents for examination:
№

	 Name of the document
	 Date
Performances
	 Note

1)
	 Feasibility report

2)
	 Contracts

3)
	 Balance report

4)
	 Conclusion SB

5)
	 Conclusion of Legal Department
		
6)
	 Conclusion of Department of Exchequer
The brief characteristic of the project.
The purposes and essence are determined: the purpose of the project is termination creation of an industrial complex and start it in operation. 
- Is assembled and the information on ability and existing opportunities of realization of the project borrow is analysed: the experience in manufacture at the borrower was recognized sufficient (delivery of dairy production on all cities of Kazakhstan);
- The parity of extra and own means is revealed: 35,5 % personal To 65,5 % extra;
- Terms of realization of the project are determined: till one year.
In the brief characteristic the following information has found reflection as: orientation of the project: the project is focused on the local market and market Аlmaty of area, and also on the markets of large cities of Kazakhstan. Support of the local / supreme body of authority: there is a support of local bodies of authority as the letter with the purposes of support of the domestic manufacturer. Guarantee and pledge base: as maintenance of a reflexivity of the credit, the borrower has given in a pledge - working capacities, structure, and also ТМZ, exceeding the sum of the credit on 33 %.                               
As are mentioned general supplier and other subcontractors; to the manager the co-ordinator of the project.                                              
                  
Rating of a financial status of the borrower.
The analysis income; the summary table of parameters of profitability of manufacture and productivity of work: 

Parameter
	 Value of parameters
	 Change

	 Beginning of year
	 End of year

Profitability of actives (tian on one enclosed теnge)

Actives:

 - Under the balance profit
	 15.2
	 4.7
	 -0.5

 - Under the pure profit
	 9.2
	 8.9
	 -0.3

The own capital:

	 -0.3

 - On balance profitable
	 21.3
	 20.6
	 -0.7

 - Under the pure profit
	 12.8
	 12.4
	 -0.4

The investments
	 2.2
	 2.39
	 0.19

Profitability of sales

General (on all kinds of activity):

	

 - Under the balance profit
	 29.5
	 29.3
	 -0.2

 - Under the pure profit
	 17.8
	 17.7
	 -0.1

On the basic activity:

	

 - Under the balance profit
	 25.4
	 24.9
	 -0.5

 - Under the pure profit
	 15.3
	 15.1
	 -0.2

Productivity of work, thousand теnge
	 6.1
	 6
	 0.1

The machine capacity fund, thousand теnge
	 7.1
	 6.9
	 -0.2

The given tables allow making the following conclusions: as a whole, on the enterprise, the deterioration in use of its property is observed. From everyone теnge, enclosed in actives, the enterprise in accounting year has received the profits less, than in accounting year, it is connected, first of all, to growth debit of debts.
Has decreased as profitability of realized production, but smaller rates in comparison with profitability of actives, that is connected to increase of a share of barter accounts in system of accounts with the suppliers and clients.

The analysis of financial stability;
         The summary table of parameters of financial stability.

Parameter

	 Value parameter
	 Recommended criterion

	 By the beginning of one year
	 On the end of year

Describing a parity of own and extra means

Factor of autonomy
	 0,83
	 0,63
	 > 0.5

Factor of financial dependence
	 1,20
	 1,59

Factor of extra means
	 0,21
	 0,29

Factor of a covering of the investments
	 0,83
	 0,63

Describing a status of turnaround means

Factor of security of financially - industrial stocks by own turnaround means
	 0,022
	 0,006
	 > 0,6

Factor of a manoeuvrability of own turnaround means
	 0,002
	 0,0015
	 > 0,5

Factor of a manoeuvrability of the functional capital
	 13,6
	 45,4
	 > 1

Describing a status of the basic means

Index of a constant active
	 0,99
	 0,99

Factor of real cost of property
	 0,89
	 0,78
	 > 0,5

Coefficients of accumulation of amortisation
	 0,66
	 0,68
	 It is less 0.25

Factor of a parity of the current actives and real estate
	 0,213
	 0,592

Proceeding from the designed data, it is possible to make a conclusion:
The share of own means in an active of the enterprise within one year has decreased, that has resulted in increase of dependence from extra means and as a consequence to reduction of a parameter of factor of a covering of the investments. However, considering specificity of activity of the borrower, about it speaks factor of a manoeuvrability of the functional capital made on the end of year 45.4, and having analysed structure of common-material stocks, it is possible to tell, what exactly the formation in a warehouse of stocks speaks about readiness of the enterprise for realization of the project.                                    
Characterizing financial stability, it is necessary to tell about the large share of the real estate in own means (К=0.99), it is explained by presence in an active of warehouse and industrial rooms. This explain growth during year of factor of a parity of the current actives and real estate, with К=0.213 up to К=0.592. 

The analysis of credit status:
The rating of credit status was carried out on the basis of factor liquidity - given factor absolute liquidity is high enough, within the limits of allowable values. Factor of a covering reflecting extreme possible level of debts for the given period is equal on the end of year 0,63, comparison with To the beginning of year (0,83), that speaks about increase of the short-term obligations, but it does not cause fears due to specificity of manufacture (enterprise the active sale of the inhabited funds, entered into operation,) is conducted.
The financial status is characterized as satisfactory, the enterprise as a whole works profitable. It is necessary to note that the received earlier credit and the interests on it were in time extinguished, default was admitted not.

The analysis of use of the capital:
The analysis of use of the capital was carried out by division of pure volume of realization on average annual cost of the own capital. Factor has made 0,81, that speaks about sufficient speed turnover of the capital.
                                
Commercial rating. The analysis of the market of raw material:
The summary table of materials and suppliers.

The name of materials
	 Suppliers

Milk natural 	 Local

Milk dry
	 Russia, Kazakhstan

The food additives
	 Local, Russia, Italy

Sugar 	 of Kazakhstan

Products from a flour
	 Kazakhstan

Packing materials
Different firms (Russia, Kazakhstan, and distant foreign countries)

The analysis of the market of ice-cream:
The market of ice cream represents the not systematized deliveries of ice cream from Russia, distant foreign countries and local often manufacturers.
The conditions of our climate do favourable conditions for realization of the given project, as the basic demand for ice cream practically is stable 6 months.   
On the market the ice cream from distant foreign countries of various quality and for the different prices is delivered. The ice-cream issued by the company "FoodMaster" will be focused on a segment with a low level of earnings, but will have a number of advantages: the ice-cream is made of natural components without addition various conservancy and food additives, and also will have protective packing and accessible price. 
The company assumes to leave on the market of ice cream with the price no more than 30-33 теnge.

Rating of strategy of marketing:
Manufacture and realization of ice cream - satisfaction of demand on cold in hot weather and good delicacy, both for children, and for the adult. The ice cream differs by natural taste of cream and sugar, at the use is not felt of artificial components.
The general capacity of an industrial complex makes 3000 pieces in change. The cost price of 1 ice cream = 17 tenge, and wholesale price will be 27 and below depending on a party. 

The procedure of payments for raw material and production:
- Conditions of the contracts with the suppliers assumes payment on the fact in accumulation of the certain sum.
 Commercial risks

Kind
	 Reason of occurrence
	 Methods of decrease
Rise in prices on raw material.
Failure of performance of the obligations by the partners.
	 Inflation 
Not decency of the partners.
	 Purchase of raw material beforehand. Prudent of the penalty in the contracts.

Technical ratio.
Substantiation of a choice of a site of capacities. At designing the opportunities were taken into account:
· Of Connection to central heat supply;
· Of Connection to a waterpipe and water drain;
· Electro supply;

Financial rating of the project.
Account of general investment costs. (Thousand dollars. USA)
		 1 quarter 	 2 quarters 	 3 quarters 	 4 quarters
The sum of the credit 	 100000 				
Development of the credit 		 57255 	 13235 	 15355 	 14155
The rest of the basic debt 		 57255 	 7049 	 85845 	 100000
Repayment of the basic debt 		 0,00 	 0,00 	 0,00 	 100000
	 Rate 				
Interests on credit 	 10% 	 1411 	 1738 	 2116 	 2465
Financial services 	 1,8% 	 1134 			
Total to repayment on quarterly 		 2545 	 1738 	 2116 	 102465
Total 					 108866

Prospective cost of realization of 1 ice cream = 27 теnge. Prospective total profit = 4071.6 thousand dollars USA. The prospective income of sales = 4071,6-2412,6 = 1 650 thousand dollars USA.
   	 Analysis with the help of methods discount - Account of pure current cost of the project:
Pure current cost of the project (at the rate discount 10 %) = 84888 thousand dollars USA.                                                        
Internal rate of return == 11.9 %

Rating of maintenance of the obligations.
Necessary cost of maintenance. Cost of maintenance should cover the sum of the credit and sum of interests, possible charges on realization of a pledge, i.e. the pledge should be not less than: the sum of the credit + sum of % of payments + charges on tendering + possible charges on realization of court + 20 % the tax to added cost at realization of a pledge. 

Offered pledge base.
In a pledge the working industrial complex appreciated in 150000 dollars is given. USA, and structure (warehouses) appreciated in 7000 dollars. USA, and also ТМZ on 6400 dollars. USA. Factor of decrease of cost pledge of property under the given project has left 33.5 %. Thus, factor of overlapping(blocking) of the loan by a pledge has made (33).
	 Proceeding from above-stated, the maintenance admits sufficient.

Acceptance of the decision about financing.
After realization of examination and on its(her) basis the manager, conducting the given project, prepared the summary under the project, which is born(taken out) for discussion of credit committee. The credit committee consists of Crediting, supervising Department, of the Vice-president of Government, director of Departments taking part in examination, director of Department of crediting representing the project.
The director of Department of Crediting representing the project, reports on results of realization of examination and responds on questions, arising during the report.    
Results of assembly of Credit committee are recorded and on
To result the order is taken out.

Financing of the project.
First step to financing the project is the submission of the application on opening of the loan account, to the application is applied:
· The Document with samples of the signatures and print of sealers certified notarially in triplicate;
· A Copy of the charter and constituent contract notarially certified (for Establishments financed from means of the state budget - the sanction of the Ministry of the Finance of Republic of Kazakhstan);
· The original Document given by a body of a tax service about production of the client on the account (for removal to a copy, item 22 инструк.266);
· The Certificate on state registration (re-registration), registration card from Region Statistic Department, copy;
· The Protocol of assembly of the shareholders on election of the chief of the enterprise;
· The Order on purpose of the persons of the representatives to dispose of the account.
In parallel to the loan account open the account of the delayed debts, account under the account of interests and account for the account of delay of payments on interests, and as, if the loan is given out in tenge an equivalent, the additional accounts on reassessment of a course difference open. How all movements of money resources occur in currency of USA, under the set forth above accounts, except for the account is direct movements of means, the course difference is fixed also at change of a currency rate. The application moves in Department of Crediting and under the order signed by the responsible people, the appropriate accounts open by Department of bookkeeping and settlement-cash service.
The following step - transfer to bank, in Department of Crediting to the manager, conducting the project, payment order with the instruction of the sum, purpose of payment (payment of the contract, contract). The manager prepares the order in Department of bookkeeping and settlement-cash service about payment of the payment order with the instruction of a source of repayment. To the payment order the Urgent obligation is applied which is acknowledgement of the consent on return to the term, established by the credit contract, of the sum received on the payment assignment(order).
With each new period of development of the credit, the bank receives the document, as the urgent obligation giving the right of the requirement of return of the mastered sum of the credit

The control of realization of the project.
With the purpose of observation of target use of the credit and control above duly return of the sum of the basic debt and compensation (interest), the bank traces activity of the financed enterprise. For the control above the above described project the following measures were carried out.
Monthly checks of target use of the credit - the documents confirming target use of money resources were requested.

Summary.
By the applicant of the project the company "FoodMaster" acts. The enterprise was created 01.07.1992 years and 10.09.1998 years have passed a re-registration. The authorised capital = 1750000 tenge. Amount working the man = 76 men.
The present project is directed on purchase of the equipment and necessary raw material to adjust manufacture of qualitative inexpensive ice cream, which will be accessible to all layers of the population.

The sum of the credit = 100000 dollars. USA
Term =12 months.
The rate of interest = 10 %
Ratio a pledge the /credit = 1,33
Prospective cost of realization of one ice-cream = 27 tenge. Prospective total profit = 4071.6 thousand dollars USA. The prospective income of sales = 4071,6-2412,6 = 1650 thousand dollars USA.
Account of pure current cost of the project and internal rate of return: pure current cost of the project (at the rate discount 10 %) = 84888 dollars USA.    
Internal rate of return = 11.9 %.
Conclusion: the financial status of the borrower does not cause fears, the project pays off within 1 year under condition of preservation of a level of the cost price and realize of the price.
The decision: the project corresponds to the memorandum of credit policy of bank, in connection, with what it is recommended to accept the project to financing.

3.3. Before court settlement of disputes at realization of enterprise activity between borrows and creditor.

Were based on experience of lawyer practice on economic businesses, the conclusion is made what not all receivership proceeding, even very serious, should come to an end by judicial suit. Infringements and the defaults of the contractual obligations cause significant property damage to the participants of economic circulation, but many from them try to return the debts by use outside court or illegal methods.
On the one hand, it is caused by the requirements of stability of the business relations and advantage of other interests before probability bear of the losses and inevitable costs, that it is possible to consider justified.
 But there are also other explanations; for example, cumbersome of judicial procedures, weakness of state law-enforcement bodies imperfection of the law, legal nihilism in public consciousness. Now, unfortunately, is much more favourable to be in a role of the debtor, than creditor, as it is possible simply to not give back the debts, though and to recognize them, and to the creditor the law assigns duties on passage of heavy procedures at collecting duties. It, except for the specified reasons, follows from current situations of the civil legislation.
 In practice it is always recommended to the parties at the resolution of dispute to reach the compromise, which can be, and not up to the end arranges the parties, but as a whole responds interest of the parties and does not worsen considerably their rule. 
The manipulation will be always connected to the claim in court with weight of material costs and problems, as in whole our judicial procedure of the sanction of economic disputes carries burdensome character: the rate state fee for submission of the statement of claim and cassation of the complaint is high, the judges do not take into account in a due measure of interests of the parties, and economic circulation.
 It is necessary to tell, that procedure and ways before and outside court of the sanctions of economic disputes, as an only practical question, is not stipulated by a concrete image legislatively, except for the Law РК " About the order of the sanction of economic disputes by arbitration courts РК ", where in an item 66 the compulsion before court of settlement of dispute before the manipulation with the claim in court is offered. The order before court of settlement as presentation of the claim is established by a Rule about the order of presentation and consideration of the claims by the enterprises, organizations both establishments and settlement of disagreements under the economic contracts from February 15, 1993 (A post. KM РК N 111.) At settlement of the attitudes of the parties in economic disputes is necessary to be guided by various rules of the legislation and customs of enterprise activity, to be able to use their opportunities in the benefit.
 Before or outside court ways and the methods of the sanction of economic disputes should respond criterion of legality, completely correspond spirit both letter of the law and contracts, made between the parties, and also should not mention and break the rights and interests of the third persons, including state. 
The actions of the parties on procedure before court of settlement of economic dispute should carry constructive and without conflict character, as in the circumstances they owe with the minimal costs having kept the business relations to leave from a difficult rule.
 Any way and method outside court of settlement of economic disputes on the character is the new civil-law bargain, as changes or supplements the old bargains and contracts, establishes for the parties the new rights and duties, consists in the written form, established by the law. Therefore to them all requirements showed to the bargains by the civil legislation are applied: freedom of will in the contract, order of the conclusion and form of the contract.
 To the basic ways and methods before and outside court the settlements of economic disputes can be related: a unilateral recognition of the debt and obligation to pay it when due hereunder, global agreement on a recognition of the debt, its decrease or failure of it the agreement about deference, concession of the right of the requirement of the debt or transfer of performance of the contract to the third person.
Before and outside court ways of settlement of disputes have one legal nature, as they express joint will of the parties at the resolution of conflict. 
The application of the claim as a first step in before court to procedure by many is perceived as the most simple action which is not requiring any expenses and a pressure of you. After the application of the claim many evade from direct contacts to the representatives of other party, explaining it is by indisputability of the requirements, declared by them. But it is visible here reason in unwillingness of some lawyers to go on the conflict or on some aggravation of the personal relations with the representatives of the debtor, as this really complex action from the psychological party and many do not maintain it. But it is necessary to take into account, that the maximal benefit and the result in the given process bring personal contact of the representatives of the parties in any sorts negotiation. It is possible to receive the answers to questions, interesting for you, it is possible to take advantage of a situation and to decline the opposite party to your position, to impose to them the initiative.
 The claim should contain, except for the requirements, also the offers on settlement of dispute, which is considered as a first step in forthcoming negotiation.
 In procedure before court of settlement of disputes it is necessary to adhere beforehand to planned plan and to define a strategic line in the relations with the opposite party.
Effective from the tactical party would be manoeuvre during negotiation: the returning some times to earlier discussed questions, on which was already achieved the oral agreement, detailed discussion of the offers and counteroffers of the opposite party, exhibiting of new questions, requirements and offers. Result it can become weariness of the opposite party, unwillingness to continue negotiation and, at the end, agreement on conditions, favourable to you.
	 One of the most effective arguments is the requirement about payment of the penalty, which can achieve the impressive sizes, and can be and exceed the basic duty. The failure of the creditor of penalty considerably improves a rule of the debtor, than its behaviour is stimulated, and, in turn, rule of the creditor does not worsen.
 The bank - creditor should in such negotiation borrow maximum rigid, but at the same time correct and constructive position. Its requirements should not touch the persons of the debtors and their representatives and help them to find an acceptable output in the circumstances. The claim should not develop in ordinary scandal or, it is worse than that, rolling on a way illegal and crime of actions. The task of the creditor consists in skill to state clear arguments and to convince the debtor of legality, of validity and perspective collecting it or some smaller debt can be absolute.
 Any result of negotiation is necessary for making out by the protocol or additional agreement, which allows effectively to connect the debtor and later to achieve from him of performance of the given promises. Such agreements can carry conditional character. For example, you refuse or abstain from submission in court of the claim the ambassador of a beginning of performance by the debtor of the obligations.
If the debtor abuses with a situation and term of execution of the given obligation does not specify, the creditor can advise to require performances of the diagram of accounts. It has effective value for the debtor.
The bank - creditor also can use opportunities of firms, which are interested in purchase of the right of the requirement of the debt from the concrete debtor, that further by mutual settlement to extinguish before it the debts. For this purpose it is necessary to receive from the debtor the necessary information on his debtors.
Deferred as property should have for the creditor precisely expressed consumer cost, that is it should understand, what material and estimated benefit can to it(him) bring the given property and whether it in the acceptable form repays the debts. This cost is fixed in the contract as a contractual price.
It is necessary to understand that after the conclusion of the agreement about deferred and its execution the initial obligation stops. Therefore the creditor should defined kind in the greater degree.
In case the debtor realizes the rule as desperate, it can offer the own actions any personal rights (for example, on use of ground or real estate etc.) for repayment of the debt.
In all cases of positive result before court of settlement of disputes the parties managed to reach the compromise, arranging both party, and to lower the costs. Such ways of the resolution of disputes use in the enterprise activity only serious private companies having proved plans and real prospects. The practice shows that the state enterprises and fine private companies are poorly interested in such procedures.
Such activity completely responds economic interests of business, promotes development of the civilized market, and strengthens the business relations.

The conclusion

The development of economy is indissoluble connected to the credit, which in the various forms will penetrate into all spheres of economic life. The huge scales of operations of banks and other credit-financial establishments growing use of not bank methods of borrowing and distribution of money resources, occurrence of the new forms and kinds of the credits, involving in the credit attitudes(relations) of all new participants testify to it.
Volume of the credits given by banks of the second level, has increased during last three years for the sum over 106,4 billion tenge or on 54 % and for 1.01.2000 years has made of 196,84 billion tenge. The quality of a credit portfolio of the majority of banks was considerably improved. But the first difficult experience of transition to market economy, development of credit mutual relation of banks with borrows has shown as far as important to bank at crediting to estimate risk, which bank incurs, giving money on loan for the long period with the purpose to receive in the future the extinguished credit with interests.
Now, during transition to the market, at the decision of a question on an opportunity of crediting on the first place the credit status of the borrower, and principle, connected to it, difference of crediting is put forward.     
By radical image the economic contents of mutual relation of banks with borrows has changed. The bank, now, is the interested partner in achievement by its clients of high results. But, despite of the achieved positive changes in practice of crediting, it is necessary to note, that for today the banks can not completely yet satisfy growing needs of economy of the bank credits.
Addressing to global experience, it is possible to notice what small densities in total amount of credit investments borrow in our Republic the consumer credit to the population. In USA it makes 46 %, and in Kazakhstan 8 %. For banks it is very important to continue to increase the own capital, to expand the activity by opening branches and additional offices, to raise a level of management of bank and most important, to develop new bank services as liasing, factoring, release of plastic maps, introduction of personal management to the large clients.
Now in all banks the work of change of traditions of the bank device should be carried out(spent), that the credit establishments to the full have developed(unwrapped) all opportunities providing highly skilled service of the clients.
Especially I desperately need in the loan objects of small and average business, agriculture. Improve a rule in this area the state programs directed on support local manufacturing slightly. The development of economy of Republic is not possible without development steady and is high-grade of a functioning network of credit establishments capable to ensure of need of economy by a complete spectrum of bank services. 
The basis for the planned tendency of economic growth in our Republic, is the further development of its financial market and, first of all expansion of crediting of real sector of economy and population.

THE LIST of the USED SOURCES

Normative legal base
1. Decree of the President of Republic of Kazakhstan " About banks and bank activity " from 13.12.95.
2. Decree of the President of Republic of Kazakhstan valid of the Law " About national bank of Republic of Kazakhstan " from March 3, 1995.
3. Decree of the President of Republic of Kazakhstan valid of the Law " About banks and bank activity in Republic of Kazakhstan " from August 31, 1995.
4. Decree of the president valid of the law " About banks and bank activity " from April 30, 1995.
5. Civil code РК (especial part).
6. Instruction " About the order of regulation of activity of banks " №1,

Clauses from magazines.
1. (Clause from the newspaper) - Aimakova L. Management of the economic analysis in bank structure / / Asia - economy and life - 1997 - January (№ 2) -с.9.
2. (Clause from the newspaper) - Коziscin With. The bank analysis today. / / Asia economy and life -1997 - January (1) - with. 7.
3. (Clause from the newspaper) – Magitov D. Modern bank system of Republic of Kazakhstan / / Asia - economy and life -1997 - January (2) - with 9
4. (Clause from the newspaper) - National bank / / a Panorama - 1996 - June 7 (№ 22) -с.8.
5. (Clause from the newspaper) - Chinenkov А.V. The bank credits and ways of maintenance of the credit obligations / / Accounts department and banks - 1996 - № 4 -с.51.
6. (Clause from a magazine) - Аbdikalikov Т.А. Financing of capital construction / / the Bulletin of accounts department -1996 - № 46 - with. 12-17.
7. (Clause from a magazine) - Аnkasov А.B. Balance of commercial bank / / Accounts department and banks -1996 - № 3 - with. 3-7.
8. (Clause from a magazine) - Даuletbekova. The account on new samples / / the Finance of Kazakhstan - 1996 - № 11 - with. 60-63.
9. (Clause from a magazine) - Леvin this year. The account of the credits of bank / / the Adviser of the bookkeeper -1996 - № 2 - with. 18-33.
10. (Clause from a magazine) - Samples М.В. About some problems of regulation of activity of credit organizations / / Money and credit -1996- № 12-с.48-54.
11. (Clause from a magazine) - Pashkov А.I. Rating of quality of a credit portfolio / / Accounts department and banks -1996 - № 3 - with 29-30.
12. (Clause from a magazine) - Тitarev Е.V. The analysis of activity of commercial bank / / Money and credit -1996 - № 12 - 46-49
13. (Clause from a magazine) – Udenkov U.N. Комплоексный the analysis in bank business / / the Financier -1996 - № 17 - with. 28-29.
14. (Clause from a magazine) Ivanov Л.М. A rating of bank activity / / Accounts department and banks - 1996 - № 1 - with. 9-12.
15. (Clause from a magazine) Isaev Н. The financial analysis in commercial bank. / / The Finance of Kazakhstan -1996 - № 10 - with. 62-6 5.
16. (Clause from the book) - Bocharev В.В. Commercial banks in the market of the investments. Аlmaty: IRK. 1996, with 41-45.
17. (Clause from the newspaper) - Маgitov D. Modern bank system of Republic of Kazakhstan / / Asia - economy and life -1997 - January (2) - with 9

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