belarus case studies

Signed projects

Board approval is the final stage in the project approval process. After Board approval, the EBRD and the client sign the deal and it becomes legally binding. Signed project lists reflect year-end data.

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Case studies

A bank for small businesses - 2008

Belarus’s first dedicated microfinance institution, the Belarusian Bank for Small Business (BBSB), was founded by the EBRD and seven other shareholders. It is helping to fill a gap in the country’s banking market by providing much-needed financing tailored to privately owned small and micro enterprises.

The BBSB operates in the Belarusian capital, Minsk and the Minsk region, where over 50 per cent of small businesses are located. Seven branches and four sales offices are expected to open in all regions of Belarus by the fifth year of operations. The new bank offers loans ranging from US$ 270 to US$ 270,000 on a purely commercial basis while concentrating on the lower end of the market (loans below US$ 10,000).

The eight investors have invested €12 million in the BBSB, €7 million as part of the finance that each of the eight founders have to provide (€2.45 million by the EBRD), and another US$ 5 million in 2008 to honour the founders' pledge to increase contributions in the bank's first two years of operations.

The finance will help kick-start the bank’s micro and small business financing activities with an aim to reach out to micro entrepreneurs and small businesses, especially in the regions outside of Minsk, where the BBSB plans to open its first two branches in early 2009.

Demand for this type of funding in Belarus is estimated to total US$ 1.4 billion, of which only 5 per cent is currently being met by the EBRD’s local commercial bank partners under a special EBRD small business lending programme.

The BBSB has capital of US$ 9.6 million. The EBRD’s seven partners in the BBSB include leading international public and private financial institutions, all of which have global microfinance experience and share a mutual objective of increasing the smallest businesses’ access to finance in Belarus. They are Germany's Commerzbank and Kreditanstalt fur Wiederaufbau (KfW), Nederlanse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), ShoreBank International, Shorecap International, Swedfund and the International Finance Corporation, the private sector lending arm of the World Bank.

BBSB’s creation complements the EBRD’s successful Micro and Small Enterprises Financing Facility in Belarus which is run through five Belarus commercial banks.

Belarusian Bank for Small Business - Donor Report 2008

The EBRD and seven international partners are launching the Belarusian Bank for Small Business (BBSB) with initial investment of €7 million to help channel financing into micro and small privately-owned enterprises in Belarus. The new bank is expected to open for business in mid-2008.

The seven other founding shareholders are:

Commerzbank (Germany);

FMO (the Netherlands);

the International Finance Corporation (IFC);

Kreditanstalt für Wiederaufbau (Germany);

ShoreBank International and Shorecap International (United States);

and Swedfund (a venture fund established by the Swedish government).

BBSB will operate initially in the Minsk region, where over 50 per cent of small businesses are located, offering loans on a commercial basis of up to US$200,000 (€136,000) but concentrating on the lower end of the market (credit below US$10,000 (€6,800)). By the fourth year of operations, the bank is expected to provide financial services to at least five other cities.

Austria, the European Union, the IFC, Japan, the Netherlands and Norway have already committed donor funding of €2.5 million to the venture, with further contributions expected from KfW and Sweden. This finance will cover bank start-up costs and encourage regional expansion.

TC funding will be required for the first three years of operations while the bank is managed by an international consultancy firm under the EBRD’s supervision.