Russia: EBRD Lends 2.9 Billion Roubles for Russian Small Businesses

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Aug 2010
Moscow, Russia, August, 31 2010 - The EBRD will lend up to 2.9 billion roubles (equivalent to Euros 76 million) to enable Credit Europe Bank to meet a growing demand for local currency loans from small and medium-sized enterprises (SME’s), especially in the regions of Russia, at a time when many institutions have cut their lending to this grass-roots sector of the Russian economy.

The borrower is Credit Europe Bank Ltd., Russia, and this unsecured five-year senior loan is the first milestone in setting up a relationship between the EBRD and this new customer which is majority-owned by the Netherlands-registered Credit Europe Group N.V. and part of one of Turkey’s largest diversified conglomerates, the Fiba Group.

As a consequence of the global financial crisis and a lack of long-term liquidity, many Russian banks were forced to cut back their lending to SME’s whose demand for credit had always far exceeded what local banks could offer. These small business customers are now showing a growing appetite for longer term loans, especially in roubles.   

Promoting lending to SME’s has always been at the core of the EBRD’s mandate in its countries of operations and the Bank’s programme of raising funding on local capital markets, including Russia’s, makes it possible to offer the long-term roubles which a customer like Credit Europe Bank needs to satisfy this surge in demand.

This is part of a shift in the EBRD’s loan portfolio towards rouble-denominated lending to support Russian small businesses. We are pleased to provide this funding through a well-managed bank with high standards of corporate governance, a good reputation and which is prepared to respond proactively to demand from SMEs in the regions of Russia, said the EBRD’s Managing Director for Financial Institutions, Nick Tesseyman.   

Credit Europe Bank is a medium-sized Russian commercial bank with a particular focus on the retail sector, mid-sized corporations and SME’s. At the end of 2009, it ranked 46th in terms of total assets. It has over 2.2 million retail customers and operates in over a quarter of Russia’s regions – with plans to spread its reach still further in the near future.



Source : EBRD
 

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