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EBRD lends $50 million to help top Russian private bank boost small business finance
MDM joins EBRD’s Russia Small Business Fund programme
One of Russia’s top private banks, MDM Bank, is joining the Russia Small
Business Fund (RSBF) lending programme which has provided over $3 billion in
funding for small businesses and grass-roots entrepreneurs in the country
since it was launched by the European Bank for Reconstruction and Development
in 1994.
A five-year $50 million loan will boost MDM’s capacity to finance small
businesses. Ranked 10th among Russian banks in terms of total assets, MDM last
year started a systematic campaign to reach out to micro, small and
medium-sized enterprises.
MDM’s fast-growing regional presence will help extend the RSBF deeper into
Russia, particularly in the south and the Far East. With the entry of MDM,
nine banks are at present participating in the RSBF programme, which operates
in some 150 cities and towns throughout Russia.
EBRD President Jean Lemierre, signing the transaction in Moscow, said that
supporting improved access to financing for small businesses was one of the
most important ways to develop the private sector.
Vicenzo Trani, head of MDM’s small business department, said: “We are sure
that with the support of EBRD, we will be able to make a strong contribution
to the development of small business in Russia.”
Cumulative disbursements of micro and small loans through the branches of the
RSBF partner-banks since the start of the RSBF programme 12 years ago have
recently passed a new milestone of $3 billion -- with over 340,000 loans made.
The RSBF was launched by the EBRD with funding from the governments of the G-7
countries and Switzerland, as well as technical assistance grants from the EU,
to stimulate the growth of a class of small, independent entrepreneurs which
began to emerge in Russia in mid 1990s.
The RSBF later served as the model for similar initiatives started by the Bank
in other countries with the aim of replicating the Russian Fund’s success.
Today the EBRD’s micro and small business finance programme is active in 18
countries, working with 84 financial institutions to providing financing to
over 1 million small businesses, most of which never previously received a
bank loan.
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