The EBRD has signed a loan agreement under which it will provide up to 600 million roubles to privately owned "Carcade". This will boost the operations of one of Russia’s market leaders in the auto leasing segment, now recovering from the financial crisis which hit the sector in 2008.
The loan will diversify Carcade’s funding base and help it offer long leases. The four-year maturity of the EBRD loan is unusually long for Russian leasing companies, which find it difficult to access long-term funding, particularly in local currency.
This senior secured loan will enable Carcade to extend longer leases on cars and light trucks to its clients, 94 per cent of which are small and medium-sized enterprises (SMEs), mainly in the regions of Russia. The company ranks second in the Russian auto-leasing sector as measured by the number of leases.
Russia’s leasing market is the world’s 7th largest by portfolio volume. It plays a structurally important economic role precisely because it provides basic financing, particularly to SMEs, a sector whose access to liquidity and capital was also severely affected by the crisis.
Leasing as a whole now accounts for 1.6 per cent of Russian GDP after peaking at 3.3 per cent in the last pre-crisis year, 2007. In the European Union, leasing accounts for an average of 5.7 per cent of GDP. The auto-leasing segment in turn accounts for around 25 per cent of the whole Russian leasing market against 50 per cent in western Europe.
Carcade, founded in 1996, has a well developed regional network with 70 offices, including 52 offices outside of Moscow and St Petersburg. The company is controlled by Poland’s Getin Holding SA, a financial group focused on Poland but which also has operations in Russia, Ukraine, Belarus and Romania.