MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) of the United Kingdom Loans $50m to Russian Automotive Leasing Company Europlan to Meet Demand From Small and Medium-Sized Enterprises (SMEs)

The European Bank for Reconstruction and Development (EBRD), an investment bank headquartered in the United Kingdom, will loan up to RUB 1.5 billion (USD 50 million) to Europlan, a Russian automotive leasing company, to meet rising demand for leases from small and medium-sized enterprises (SMEs) in Russia.

The global financial crisis reduced new business leases by 56 percent in 2009. The reduction in leases hit SMEs in Russia particularly hard because they rely heavily on leasing for obtaining physical assets like automobiles.

EBRD hopes to fund the small-business sector and stimulate the economy by making the loan to Europlan, whose clients are 90 percent SMEs. Europlan has operations in 72 of Russia’s 83 regions and has partnered with EBRD since 2002. This is the fifth loan to Europlan from EBRD [1].

By John Howard-Smith, Research Associate

About European Bank for Reconstruction and Development (EBRD): European Bank for Reconstruction and Development (EBRD) is an international 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 by providing loans, debt securities, equity investments, guarantees and technical assistance to micro and small businesses as well as commercial banks and non-bank microfinance institutions (MFIs). As of the end of 2009, EBRD had total assets of EUR 32.5 billion, or USD 44.7 billion.

[1] European Bank for Reconstruction and Development: “1.5 billion rouble EBRD loan for Russian leasing sector”, http://www.ebrd.com/pages/news/press/2010/101029.shtml

MicroCapital’s Microfinance 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)

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