MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Considers Syndicating $25m Investment in Minsk Transit Bank (MTB) of Belarus for On-Lending to Micro-, Small, Medium-sized Enterprises (MSMEs)

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral financial institution, is considering investing USD 25 million in Belarusian commercial bank Minsk Transit Bank (MTB) for on-lending to micro-, small and medium-sized enterprises (MSMEs). Under the terms of the proposed deal, EBRD would provide the funds in two phases, starting with a syndicated A/B loan of USD 20 million, with EBRD providing USD 5 million – the A portion of the loan – and accepting the remaining USD 15 million – the B portion of the loan – from interested financial institutions. Additionally, EBRD is considering an investment of BYR 50 billion (USD 5 million) in MTB for on-lending to MSMEs and to increase MTB’s capital expenditures and working capital. The funds would be disbursed via senior debt and a syndicated loan. Both of the proposed lending agreements seek to increase the access of private Belarusian MSMEs to local-currency borrowing.

MTB reported total assets of BYR 1.8 trillion (USD 212 million) as of 2011. EBRD provides loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

By Meraj Husain, Research Associate

About Minsk Transit Bank (MTB)

Founded in 1994, Minsk Transit Bank (MTB) is a commercial bank that offers financial services for individual and corporate customers in the Belarus Republic. It also registers rights for governmental and corporate security offerings. As of December 31, 2011, MTB reported total assets of BYR 1.8 trillion (USD 212 million).

About European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and it is owned by 64 countries as well as the European Investment Bank and the European Union as of 2014. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

Sources and Additional Resources

[1] European Bank for Reconstruction and Development: Minsk Transit Bank Local Currency MSME Loan

MicroCapital, February 2, 2014, European Bank for Reconstruction and Development (EBRD) to Loan $25m to Belvnesheconombank (BelVEB) of Belarus to Support On-lending to Micro-, Small, Medium-Sized Enterprises (MSMEs)

MicroCapital, February 25, 2013, Minsk Transit Bank, Belgazprombank of Belarus Access $50m Facility for SME Energy Efficiency from European Bank for Reconstruction and Development (EBRD)

MicroCapital, February 1, 2013, Belarus Drafts Decree Regulating Microfinance Industry

MicroCapital, March 8, 2011, The European Fund for Southeast Europe (EFSE) Lends $5m to Minsk Transit Bank of Belarus

MicroCapital, July 3, 2009, The European Bank for Reconstruction and Development (EBRD) Lends $10m from Its Microfinance Program to Minsk Transit Bank (MTB) of Belarus

MicroCapital Universe Profile: Minsk Transit Bank

MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)

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