|
EBRD makes loan to Russia’s VTB 24 bank
Deal brings large swathes of Russia within reach of EBRD’s small business programme
The European Bank for Reconstruction and Development, the pioneer of small
business lending in Russia, has provided a $200 million syndicated loan to
enable VTB 24 to offer credit to micro, small and medium-sized enterprises
across the country.
VTB 24 thus joins 9 other banks in Russia and over 90 financial intermediaries
in the EBRD’s countries of operation with which the Bank is working to support
microfinance
The EBRD is taking up to $150 million of this loan for its own account. The
remaining $50 million will be syndicated to international banks under an EBRD
A/B loan structure. Barclays Capital, the investment banking division of
Barclays Bank PLC, is acting as Mandated Lead Arranger, Bookrunner and
Underwriter of the $50 million EBRD B Loan.
This new partnership with VTB 24 will significantly increase the reach of the
EBRD’s small business lending programme, adding 39 Russian regions or
republics where EBRD-supported credits will be available for small enterprises
to improve their businesses, thus helping to diversify the economy and
creating sustainable growth from the ground up.
The main instrument of the EBRD’s path-breaking efforts in this sector has
been the Russia Small Business Fund (RSBF), thanks to whose funding Russian
partner banks have been able to make nearly 350,000 small, micro and
medium-sized loans for a cumulative total of $3.3 billion since the RSBF was
launched with the backing of the G-7 and Switzerland in 1994.
EBRD President Jean Lemierre said supporting small businesses lies at the
heart of the Bank’s mission, but that much more work needed to be done to help
create a thriving sector which could multiply jobs and give ordinary people
the chance to improve their lives. In Russia alone, aggregate demand for this
type of credit was estimated at $20-30 billion and the funding shortage was
one of the biggest impediments to growth for small businesses, Mr. Lemierre
said at a signing ceremony in Moscow.
VTB 24 President Mikhail Zadornov said small business lending was a priority
for his bank and that working with the EBRD in this sphere was very important.
“Our small business lending programme is one of the leading ones on the
Russian market and our loan portfolio already exceeds $700 million,” Mr.
Zadornov said.
VTB 24’s expanding network gives the EBRD a means to reach out to large
swathes of the population which have never benefited from a bank loan before.
A key component of the Bank’s cooperation with VTB 24 will be a programme
funded by the EU to train loan officers in small business lending techniques
in the Russia’s Southern Federal District, part of a bid to foster the
economic revival of the northern Caucasus.
|
