|
EBRD and seven partners launch Belarusian Bank for Small Business
New bank to reach out to private micro and small enterprises
The European Bank for Reconstruction and Development and seven international partners are taking the first steps to launch the new Belarusian Bank for Small Business (‘BBSB’). The bank will help fill a gap in the country’s banking market by providing much-needed financing tailored for privately-owned small and micro enterprises.
The shareholders will sign the agreement to invest EUR 7 million in BBSB today with a pledge to increase their investment in BBSB by additional EUR 5 million after the first two years of operations. The new bank is expected to open its doors for business in the middle of next year.
The EBRD’s seven partners in the BBSB include leading international public and private financial institutions, all of which have global microfinance experience and share a mutual objective of increasing the smallest businesses’ access to finance in Belarus. Shareholders are also committed to support BBSB with donor funds in order to ensure the implementation of BBSB’s mandate.
In addition to the EBRD, the founding shareholders are:
• Commerzbank AG (Germany)
• Kreditanstalt fur Wiederaufbau (KfW) (Germany)
• Nederlanse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) (The Netherlands)
• ShoreBank International Ltd., an institution dedicated to expanding access to capital for small businesses (US)
• Shorecap International Ltd., an institution specialising in providing micro and small business loans in transition economies (US)
• Swedfund, a venture fund established by the Swedish government (Sweden)
• The International Finance Corporation (IFC), the private sector lending arm of the World Bank
Initially, the BBSB will operate in Minsk and the Minsk region where over 50 percent of small businesses are located. Seven branches and four sales offices are expected to open in all regions of Belarus by the fifth year of operations. The new bank will offer loans ranging from $100 to $200,000 on a purely commercial basis while concentrating on the lower end of the market (loans below $10,000).
The new bank will operate as a closed Joint Stock Company with a full banking license. ShoreBank International, one of the eight founders of the new bank, will act as the bank’s technical partner and management company. ShoreBank, part of ShoreBank Corporation headquartered in Chicago, is an institution dedicated to expanding access to capital for small businesses and households.
The project has been made possible through support from donors including Japan, Austria, Norway, the EU, Netherlands and IFC. These donors have already committed EUR 2.5 million. KfW and Sweden are expected to contribute further funds, pushing total support to over EUR 3 million. These funds will help BBSB cover start-up costs and will accelerate its regional expansion. By the fourth year of operations, BBSB is expected to provide financial services to at least five cities besides Minsk.
The birth of the new bank represents the fulfilment of a public commitment made by the EBRD in its 2006 Belarus strategy to work on the creation of a dedicated microfinance institution for the country. The establishment of BBSB has the full support of the government of Belarus and results from a productive dialogue with the National Bank of Belarus, the country’s central bank. The project is also in line with the Government’s recently announced strategy for the development of the small and medium townships.
|
