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EBRD boosts small-business lending programme in Russia
Russian Small Business Bank gets third US$ 30 million loan in two years
The European Bank for Reconstruction and Development is advancing an additional US$ 30 million to the Russian Small Business Credit Bank (KMB), the main institution through which it has been lending money to micro, small and medium-sized Russian enterprises.
This is the third loan of its kind to KMB to be made through the Russia Small Business Fund (RSBF), the ground-breaking programme set up by the EBRD and G-7 countries which has advanced 65,000 SME loans with a cumulative value of US$ 685 million since it started in 1994. In all, the EBRD and RSBF have lent KMB US$ 90 million to foster the growth of small, independent entrepreneurs.
KMB is playing an increasingly important role in providing finance for small Russian businesses that historically have found it extremely hard to obtain credit. KMB has become the first foreign-owned bank with a countrywide branch network and in the process has made over 15,000 SME loans worth a cumulative US$ 195 million since it was founded by the EBRD in 1999.
The RSBF was launched with US$ 150 million in contributions from the G-7. This sum was matched by the EBRD to create a lending pool of US$ 300 million for SMEs in Russia. This amount was recently increased to US$ 450 million. RSBF loans can be as small as US$ 30. The upper limit on a single RSBF loan is US$ 155,000. This year alone, over 20,500 RSBF loans worth US$ 180 million have been made in 100 Russian cities.
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In the first nine months of 2001, KMB made nearly 5,900 loans to SMEs in Russia for just under US$ 93 million. KMB is operating in 39 cities and towns of the Russian Federation.
The owners of KMB are: EBRD (35.2%), Soros Economic Development Fund (35.2%); the German state investment fund DEG
(Deutsche Investitions- und Enwicklongsgesellschaft mbH) (21.9%) and Triodos Bank NV (7.7%).
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