VTB Bank Kazakhstan SME Credit Line

Location:

Kazakhstan

Project number:

43285

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Status:

Cancelled

PSD disclosed:

28 May 2012

Project Description

The EBRD is considering a loan of US$ 30 million equivalent in Kazakhstan tenge to JSC VTB Bank Kazakhstan (VTBK) for on-lending to local small and medium enterprises (SMEs), with a focus on SMEs located outside the capital cities of Astana and Almaty. With the help of this loan VTBK aims to increase its market share in the SME segment, leveraging VTB Group’s experience in other CIS countries.

Transition Impact

The transition impact of the project will arise from increasing the availability of local currency, medium-term financing to SMEs in Kazakhstan, including the regions outside Astana and Almaty. The project, which also envisages technical cooperation through provision of advisory services to VTBK by an external consultant, will look into VTBK's internal lending technology and its application across the branch network, facilitating the sustainability of the bank's SME lending.

The Client

The Joint Stock Company Bank VTB Kazakhstan is a subsidiary of VTB Bank OJSC, an investment grade sponsor and the second largest bank in Russia. VTB Kazakhstan was established in May 2009. It is a universal bank with US$ 467 million in total assets as of 31 March 2012.

EBRD Finance

Senior loan in Kazakhstan tenge to the amount of US$ 30 million equivalent.

Project Cost

Kazakhstan tenge equivalent of US$ 30 million.

Environmental Impact

Categorised FI. VTBK is in compliance with EBRD Performance Requirement (PR) 2 and will strengthen its environmental and social risk management procedures. The EBRD plans to provide environmental and social risk management training to VTBK in 2012. For the coming operation, VTBK is required to comply with PRs 2 and 9 and to provide annual environmental and social reports to the Bank.

Technical Cooperation

So far, the bank has received technical co-operation (TC) support in the area of trade finance; several VTBK employees have participated in the TFP eLearning programme.

The proposed SME loan is envisaged to be complemented by TC in the form of advisory services to support SME lending. The consultant to be hired for its implementation will review the current SME lending procedures and internal structures with a view on improving their efficiency. The consultant will also train the bank’s loan officers in credit analysis, monitoring and problem loan management and help the bank to roll-out SME lending in all branches. It is envisaged that the TC assignment will be partly funded by VTBK and partly – by the Government of Luxembourg through the Luxembourg Official Development Assistance Fund with the EBRD. Selection and contracting of the consultant will be subject to further approvals and availability of funding.

 

Business opportunities

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