The European Bank for Reconstruction and Development (EBRD) continues to support private MSMEs in Belarus with a multi-currency MSME (medium, small and micro enterprises) facility totalling up to US$20 million equivalent to Belgazprombank.
Part of the facility is provided in local Belarusian ruble (BYR), diversifying the bank’s funding base and providing additional access to BYR for small private businesses.
The loan’s BYR part, the first EBRD transaction in local currency in Belarus, will facilitate on-lending to MSMEs in local currency. The local currency loan is provided via the Currency Exchange Fund (“TCX”), an innovative financial institution which provides long- term local currency and interest rate derivatives in emerging market currencies to its investors and their clients.
This EBRD loan will encourage the emergent growth in lending demand within the MSME sector, which has been severely impacted by the economic difficulties of 2011. The sub-loans will be provided to private MSMEs and used for capital expenditures and working capital.
Belgazprombank has been an EBRD client since 1996 and is currently one of the key players in MSME financing in Belarus with a proven track record and significant experience supported by an extensive branch network throughout the country.
“The EBRD is continuing to support to the development of the private sector in Belarus by providing much needed financing for small businesses. This transaction is tailored to meet the demand for loans in local currency. It will help small businesses in Belarus to better manage their risks”, said Francis Delaey, Head of the EBRD office in Minsk.
In Belarus, the EBRD focuses on promoting private businesses, MSMEs developing the banking sector and improving critical infrastructure. In 2012, the EBRD’s investments in the Belarus financial sector so far amount to €19.2 million (excluding trade facilitation). The EBRD has to date committed over €1.03 billion in various sectors of the Belarus economy.
TCX, whose founders include such international financial institutions as EBRD, IFC, FMO, DEG and KfW as well as other investors, started operations in 2008 and has its headquarters in the Netherlands. As at 31 December 2011, the Fund had hedged more than USD 1 billion in long-term loans made in the currencies of 39 developing countries.