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EBRD backs leasing for small Russian businesses
$10 million loan to help regional spread of U.S.-backed leasing company
The European Bank for Reconstruction and Development is lending $10 million to Russia's leading provider of leasing services to small and medium-sized enterprises, DeltaLeasing, which operates in 17 Russian cities and is a wholly-owned subsidiary of the US-Russia Investment Fund.
The aim of the four-year loan is to help DeltaLeasing broaden its regional reach and give Russian small businesses a wider choice of financial options in a country where bank finance is still not fully developed and where longer-term funding is in short supply, Jonathan Woollet, director for non-bank financial institutions at the EBRD, said at a signing ceremony in Moscow.
Helping SMEs is a major pillar of the EBRD's strategy in Russia, where more than 70,000 loans worth over $750 million have been advanced under a separate EBRD programme launched in 1994 and known as the Russian Small Business Fund, which is funded largely by the G7 countries and Switzerland.
Mr Woollet added that while leasing in Russia still accounts for a negligible proportion of capital investment compared with most industrialised countries, it has in recent years begun to develop as a viable financing instrument for local enterprises requiring medium to long-term funding to replace or upgrade their production facilities.
DeltaLeasing typically provides US dollar-indexed leases of $5,000-$500,000 in local currency for a maximum of five years. The company has developed close relationships with vendors of western equiment, and the printing and packaging industries account for 42 percent of the outstanding leases in its $20 million portfolio.
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