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EBRD boosts leasing company working with small businesses in Russia
$10 million loan to help firms needing to lease commercial vehicles and printing equipment
The European Bank for Reconstruction and Development has provided a $10 million loan to Element Leasing, part of the Basic Element group, to support small enterprises needing to lease business equipment, including commercial vehicles, in the regions of Russia.
The 5-year loan is the longest Element Leasing has obtained to date. It will enable it to offer leases with longer tenors, a major market requirement. The company has a regional focus and its extensive branch network covers 75 cities, one of the largest such networks in Russia.
Alain Pilloux, EBRD Business Group Director for Russia, said it was important for the Bank to support the spread of leasing in Russia, adding that it was the most effective way for many small companies to finance their capital needs. Mr. Pilloux indicated that the loan to Basic Element’s subsidiary had been facilitated by the holding’s implementation earlier this year of its commitment to higher transparency and disclosure standards.
The leasing sector has been one of the fastest growing segments of the Russian financial industry over the last 5 years as the country began to make up for years of under-investment in capital goods. Nevertheless, leasing penetration levels in Russia are still low compared to those in developed western markets.
The lack of access to long-term funding has been one of the biggest impediments to the growth of independent leasing companies in Russia.
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