The European Bank for Reconstruction and Development (EBRD), an international financial institution headquartered in the UK, recently announced that Bank im Bistum Essen, a German cooperative bank committed to socially responsible lending, has funded a 3-year USD 3 million B loan as part of a USD 13 million loan package for Russia’s Transcapitalbank (TCB). EBRD has committed to funding a 4.5-year USD 10 million A loan.
The loan proceeds will be used to finance TCB’s lending to small and medium-sized enterprises (SMEs) under EBRD’s Russia Small Business Fund (RSBF). The B loan is priced at 4 percent over 6-month London Interbank Offered Rate (LIBOR), but the A loan pricing has not been disclosed. EBRD’s partners in such transactions have traditionally been commercial banks; this marks the first time an institution with a socially responsible lending mandate is co-financing funds for a Russian borrower.
TCB was founded in 1992 with a focus on micro-, small and medium-sized businesses. EBRD has been a TCB shareholder since 2006 and holds a 28.6-percent stake as of 2010.
By Carol Kim, Research Associate
About European Bank for Reconstruction and Development (EBRD): EBRD is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe and Central Asia. 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). Its operating assets for fiscal 2009 were reportedly EUR 6.1 billion (USD 8 billion).
About Transcapitalbank (TCB): Transcapitalbank is a banking institution in Russia that as been providing banking services for individuals and institutions since 1992. The bank’s primary operations are focused on corporate banking, loan financing and support of small and medium-sized businesses in all sectors of the economy. As of July 2011, Transcapitalbank’s network consists of 71 outlets, located in 18 regions. Transcapitalbank does not report to the US-based nonprofit Microfinance Information Exchange (MIX).
Sources and Additional Resources:
European Bank for Reconstruction and Development (EBRD) Press Release: “EBRD Attracts New Type of Lender to Russian Market”, August 2011, http://www.ebrd.com/pages/news/press/2011/110817.shtml
MicroCapital.org: “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) to Loan $14m to Banca Intesa Beograd of Serbia for On-Lending to Small and Medium-Sized Enterprises (SMEs)”, August 2, 2011, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-to-loan-14m-to-banca-intesa-beograd-of-serbia-for-on-lending-to-small-and-medium-sized-enterprises-smes/
MicroCapital.org: “MICROCAPITAL BRIEF: International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD) Syndicate $164m Debt Financing Package for Russia’s Transcapitalbank”, July 22, 2010, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-and-european-bank-for-reconstruction-and-development-ebrd-syndicate-164m-debt-financing-package-for-russia’s-transcapitalbank/
MicroCapital’s Universe Profile: European Bank for Reconstruction and Development (EBRD), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+(EBRD)
MicroCapital’s Universe Profile: Transcapitalbank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Transcapitalbank#Transcapitalbank
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