MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) to Guarantee $664m to Vnesheconom Bank (VEB) for Financing Micro-, Small, Medium-Sized Enterprises (MSMEs)

The European Bank for Reconstruction and Development (EBRD), a UK-based development finance institution, is reviewing a proposal to guarantee loans of EUR 500 million (USD 664 million) to be disbursed by Vnesheconombank (VEB), a development bank owned by the government of Russia, to provide funding for micro-, small and medium-sized enterprises (MSMEs) through partner banks.

Center-Invest Bank (CIB) and Nizhny Novgorod Banking Center (NBD), two Russian banks that serve small and medium-sized Enterprises are expected to be the first two beneficiaries of the guarantee. The amount they may receive has not been announced.

As of 2012, VEB had a total of RUB 2.9 trillion (USD 91.3 billion) in assets. The same year, the bank disbursed a total of RUB 4.4 billion (USD13.9 billion) in loans.

By Ernie B.D. Wulff, Research Associate

About the Vnesheconombank (VEB)

The Vnesheconombank (VEB) is a Russian, state-owned Development Bank headquartered in Khabarovsk. The bank began operations in 2007 and aims to provide investment advice, insurance and technical support for projects in Russia and abroad. It does this by providing support for exports of Russian products as well as supporting SMEs. As of 2012, VEB had a total of RUB 2.9 trillion (USD 91.3 billion) in assets. The same year the bank disbursed a total of RUB 4.4 billion (USD 13.9 billion) in loans.

About The European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is a multilateral 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, 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 2012, EBRD invested EUR 8.7 billion (USD 11.4 billion) in 388 projects.

About Center-Invest Bank (CIB)

The Center-Invest Bank (CIB) is a lending institution headquartered Rostov-on-Don, Russia. The bank began operations in 1992 and counts the European Bank for Reconstruction and Development among its shareholders as of 2012. It aims to finance operations that are both commercially viable and assist development of the Small and medium enterprises sector. It does this by providing services including cash settlement, loans, deposits, securities, financial leasing options, trade finance, factoring and payroll. In 2012, CIB had RUB 61.4 trillion (USD 2.2 trillion) in net assets.

About the Nizhny Novgorod Banking Center (NBD)

Nizhny Novgorod Banking Center (NBD) is a small and medium enterprise lending institution headquartered in Nizhny Novgorod. The Bank began operations in 1992 and has joint projects with international development organizations including the European Bank for Reconstruction and Development. It aims at SME by providing loans, deposits and technical assistance.[All financial information is in Russian, not been able to translate it].

Sources and Additional Resources

[1] European Bank for Reconstruction and Development Story: “SME Guarantee Framework”,

http://www.ebrd.com/pages/project/psd/2013/45349.shtml

MicroCapital story, May 13, 2013, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD), European Union Commit $25m to Kyrgyz Sustainable Energy Financing Facility (KyrSEFF),”

https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-european-union-commit-25m-to-kyrgyz-sustainable-energy-financing-facility-kyrseff

MicroCapital story, March 8, 2013, “MICROCAPITAL BRIEF: EBRD Plans $200m to Expand Turkish Sustainable Energy Finance Facility (TurSEFF) for Small and Medium-sized Enterprises, Private Households,”

https://www.microcapital.org/microcapital-brief-ebrd-plans-200m-to-expand-turkish-sustainable-energy-finance-facility-turseff-for-small-and-medium-sized-enterprises-private-households/

MicroCapital story, February 25, 2013, “MICROCAPITAL BRIEF: Minsk Transit Bank, Belgazprombank of Belarus Access $50m Facility for SME Energy Efficiency from European Bank for Reconstruction and Development,”

https://www.microcapital.org/microcapital-brief-minsk-transit-bank-belgazprombank-of-belarus-access-50m-facility-for-sme-energy-efficiency-from-european-bank-for-reconstruction-and-development-erbd/

MicroCapital story, November 14, 2012, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Lends $70m to Garanti Bank of Turkey, Hipotekarna Banka of Montenegro, Bai Tushum of Kyrgyz Republic,”

https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-lends-70m-to-garanti-bank-of-turkey-hipotekarna-banka-of-montenegro-bai-tushum-of-kyrgyz-republic-2/

MicroCapital story, August 6, 2012, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Extends Credit Line to Turkey’s Vakiflar Bankasi (Vakifbank) Worth $25m,”

https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-extends-credit-line-to-turkeys-vakiflar-bankasi-vakifbank-worth-25m/

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

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

MicroCapital Universe Profile: Vnesheconombank (VEB)

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Vnesheconombank+%28VEB%29

MicroCapital Universe Profile: About Center-Invest Bank (CIB)

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Center-Invest+Bank+%28CIB%29

MicroCapital Universe Profile: Nizhny Novgorod Banking Center (NBD)

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nizhny+Novgorod+Banking+Center+%28NBD%29

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