EBRD expands number of bank participants in Belarus small business lending

EBRD expands number of bank participants in Belarus small business lending

EBRD expands number of bank participants in Belarus small business lending

The FINANCIAL -- According to EBRD, as part of its efforts to stimulate grass-roots economic growth in Belarus, the European Bank for Reconstruction and Development has provided loans totaling $7 million to two more private Belarusian banks, the Reconversion and Development Bank (RRB) and Belrosbank.


This brings to five the number of local banks participating in EBRD programmes aimed at giving micro, small and medium-sized businesses in the country increased access to finance. In addition to newly joined members RRB and Belrosbank, existing partners include Priorbank, Belgazprombank and Minsk Transit Bank (MTB).


Belrosbank, controlled by Russia’s Rosbank, received a five-year loan of $4 million earmarked for making sub-loans to micro and small businesses of up to $100,000 each, extending to a range of $100,000 to $300,000 for medium-sized enterprises. Belarus’s privately-owned RRB received a five-year loan of $3 million which will be used to offer sub-loans of up to $100,000 each to micro and small businesses, extending to $500,000 each for medium-sized ones.


Funding for both banks comes under a $25 million EBRD Framework for financing micro, small and medium businesses set up at the end of 2004 and expanded in 2007.

Both RRB and Belrosbank are already experienced in extending loans to small and medium-sized enterprises. Technical assistance aimed at strengthening the institutions and further developing the SME lending activity will be provided through the Central European Initiative programme for new participating banks.

The regional outreach of the EBRD’s Microlending programme through participating banks currently spans all of Belarus’s six regions (oblasts) – Brest, Gomel, Grodno, Minsk, Vitebsk and Mogilev -- and covers both oblast centers and five more sattelites towns. The number of loans reached 9,969 as at the end of October 2007, for a total of $110.9 million.


With the entry of the new participating banks, the plan is to expand microlending activities in 2008 by adding at least three new branches in a minimum of two of the country's regions.


On December 12, the EBRD and seven international partners launched a dedicated bank in Minsk, the Belarusian Bank for Small Business. This will operate in parallel to the EBRD's programme with privately-owned local commercial banks.