MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Supports Small and Medium-Sized Enterprises (SMEs) with $25m Loan to UniCredit Leasing Ukraine

The European Bank for Reconstruction and Development (EBRD), an international finance institution, recently loaned USD 25 million to UniCredit Leasing Ukraine, the Ukrainian arm of the international leasing company UniCredit Leasing, in an effort to increase loans to small and medium-sized enterprises (SMEs). The loan to a leasing company indicates that the EBRD sees value in leasing as a form of financing for SMEs that are unable to purchase equipment outright.

The USD 25 million loan is part of a USD 125 million financing package to UniCredit Leasing that was approved in 2009. According to an EBRD press release, Ukrainian SMEs rely on leasing to gain access to equipment due to the fact that traditional finance institutions, such as banks, tend to focus on retail clients and larger businesses instead of providing loans to SMEs [1].

About UniCredit Leasing

Founded in 2007, UniCredit Leasing aims to provide customers with a single access point to leasing services. UniCredit Leasing has divisions in 17 European countries and is a member of UniCredit Group, which has total assets worth EUR 1,060 billion (the equivalent of USD 1,443 billion). UniCredit Group was created in 1998 by the merger of nine Italian banks and now has offices in 22 countries across Europe.

About the European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is, according to its website, “the first international financial institution of the post Cold War period.” Headquartered in London, the bank began operations in 1991 upon the agreement of 40 countries and is now “owned by 61 countries and two intergovernmental institutions.” It aims to “finance operations that are both commercially viable and assist development” in 29 countries in Central Europe and Central Asia. It does this 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).

By Eric McKay, Research Assistant

Bibliography

[1] European Bank for Reconstruction and Development Press Release, “EBRD supports UniCredit Leasing Ukraine”, February 19, 2010, http://ebrd.com/new/pressrel/2010/100219b.htm

Additional Links

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

MicroCaptial Universe: UniCredit Leasing: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=UniCredit+Leasing

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