EBRD deepens cooperation with Belarusky Narodny Bank

By Anton Usov


Belarusian businesses to benefit from new US$ 10 million facility

The European Bank for Reconstruction and Development (EBRD) is engaging Belarusky Narodny Bank (BNB-Bank) into its Risk Sharing Facility (RSF), a special financing programme designed to share risk in loans provided to small and medium-sized companies. BNB-Bank becomes the first Belarusian financial institution to join the RSF.

Under the RSF agreement, the EBRD and BNB-Bank will each provide up to US$ 10 million to share in the risk of loans to be provided by BNB-Bank to Belarusian  companies. It is expected that the EBRD will share up to 50 per cent of the risk on individual loans, allowing BNB-Bank to expand their lending to a greater number of companies, most of which are smaller businesses and would not otherwise have access to EBRD financing.

The privately-owned BNB-Bank has been a client of the EBRD since 2011 and has established itself as a growing force in SME lending in Belarus. BNB-Bank has to date successfully participated in a variety of EBRD financial programmes in Belarus, ranging from credit lines to small businesses, a syndicated loan facility and the Trade Facilitation Programme (TFP).

The participation in the RSF will allow BNB-Bank to expand its relationship with the EBRD and acquire new banking techniques and know-how to carry out efficient SME financing activity across Belarus. It will also help BNB-Bank diversify its funding sources and improve the maturity profile of its balance sheet, as well as to successfully compete with larger players in the local banking sector.

The RSF is jointly implemented by the EBRD’s SME Finance and Development Group and the Financial Institutions team. The Facility covers a variety of financial products including senior and subordinated loans, mezzanine capital investments, letters of credit and guarantees available in euros, US dollars or local currencies.

Regional banks and leasing companies, eligible to participate in the RSF, are able to offer financing with longer maturities to their clients, most of which are small and medium-sized businesses. In the context of the RSF, the EBRD also provides a much-needed technical assistance to the financial institutions such as BNB-Bank, to improve SME and corporate lending practices.

To date the EBRD has made available nearly €300 million to over 110 small and medium-sized companies through risk-sharing mechanisms through 26 partner banks in 10 countries.

The EBRD is a major investor in Belarus. As of 1 June 2015, the Bank had invested €1.7 billion spread over 70 projects, most of which are in the private sector.