MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD), International Finance Corporation (IFC) Promote Lending Against Crop Receipts in Russia, Ukraine

The European Bank for Reconstruction and Development (EBRD), a multilateral finance institution based in London, and International Finance Corporation (IFC), the private-investment arm of the World Bank Group, are working together to promote lending against crop receipts of Russian and Ukrainian farmers in an effort to increase investment in agribusiness operations by allowing farm owners to use future harvests as collateral when applying for loans [1] [2].

EBRD and IFC reportedly plan to assist officials from Russian and Ukraine in studying Brazil’s crop receipts programme, which was enacted in 1994 and has allowed for the development of annual business of USD 20 billion.

EBRD Deputy Director for Agribusiness Peter Bryde said, “This initiative, which should result in joint EBRD and IFC lending against future crops, will give a boost to the development of agribusiness in EBRD countries of operations, enabling local companies to access funding for their growth [1]”.

By: Alexandra Pattee, Research Associate

About European Bank for Reconstruction and Development (EBRD): The European Bank for Reconstruction and Development (EBRD) is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is owned by 61 countries as well as the European Investment Bank and the European Union as of year-end 2010. The bank invests primarily in private sector clients, seeking to promote entrepreneurship and foster transition towards open and democratic market economies. 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 EUR 6.1 billion (USD 8 billion). With 112 microfinance investments, the bank has allocated EUR 439.5 million (USD 2 billion) to microfinance.

About the International Finance Corporation (IFC): The International Finance Corporation (IFC) is a member of the World Bank Group that was created to support private-sector development, mobilize private capital and provide advisory and risk mitigation services to businesses. IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reported net income of USD 1.75 billion, total assets of USD 61 billion and return on assets of 3.1 percent.

Sources and Resources:

[1] European Bank for Reconstruction and Development (EBRD) Press Release, “EBRD and IFC to work on new financial instruments for Russian and Ukraine farmers”, http://www.ebrd.com/pages/news/press/2011/110331.shtml

[2] International Finance Corporation Press Release, “IFC and EBRD Support Russia and Ukraine to Increase Farm Production, Decrease Global Food Prices”http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/35330A039BC7276A852578640059723B?OpenDocument

MicroCapital.org Article, March 31, 2011, “International Finance Corporation (IFC) Loans $20m to Agricultural Cooperative Bank of Armenia (ACBA)-Credit Agricole Bank to Increase Lending to Micro-, Small and Medium-Sized Enterprises (MSMEs)”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-20m-to-agricultural-cooperative-bank-of-armenia-acba-credit-agricole-bank-to-increase-lending-to-micro-small-and-medium-sized-ent/

MicroCapital.org Article, March 23, 2011, “International Finance Corporation (IFC) to Purchase 18 Percent Stake in National Rural Support Programme Microfinance Bank (NRSP MF Bank) of Pakistan in Effort to Boost Farmers’ Access to Finance”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-to-purchase-18-percent-stake-in-national-rural-support-programme-microfinance-bank-nrsp-mf-bank-of-pakistan-in-effort-to-boost-farmers-a/

MicroCapital.org Article, March 1, 2011, “European Bank for Reconstruction and Development (EBRD), Credit Agricole Serbia Accept Warehouse Receipts as Collateral for $27m in Loans to Agribusinesses”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-credit-agricole-serbia-accept-warehouse-receipts-as-collateral-for-27m-loans-to-agribusinesses/

MicroCapital.org Article, February 1, 2011, “European Bank for Reconstruction and Development (EBRD) Loans $3m to Mol Bulak Finance of the Kyrgyz Republic for On-Lending to Small and Medium Enterprises (SMEs)”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-3m-to-mol-bulak-finance-of-the-kyrgyz-republic-for-on-lending-to-small-and-medium-enterprises-smes/

MicroCapital.org Article, June 10, 2011, “International Finance Corporation (IFC) Loans $3m to Agricultural Bank of Armenia (ACBA) Leasing for Small and Medium-Sized Enterprises (SMEs)”, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-3m-to-agricultural-cooperative-bank-of-armenia-acba-leasing-for-small-and-medium-sized-enterprises-smes/

MicroCapital.org Article, May 7, 2010, “European Bank for Reconstruction and Development (EBRD) Provides $1m For Small and Medium-sized Agricultural Enterprises to Tajikistani Bank Amonatbonk”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-provides-1m-for-small-and-medium-sized-agricultural-enterprises-to-tajikistani-bank-amonatbonk/

MicroCapital’s Microfinance Universe: European Bank for Reconstruction and Development (EBRD), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital’s Microfinance Universe: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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