MICROCAPITAL BRIEF: EBRD Commits $1.1b as “First Step” in Response to Coronavirus; Targets Include SMEs, Women-owned businesses

The UK-based multilateral European Bank for Reconstruction and Development (EBRD) recently allocated EUR 1 billion (USD 1.1 billion) to provide “immediate support” as a “first step” to addressing disruptions caused by the COVID-19 pandemic. The targets include boosting trade finance, particularly as it can assist small and medium-sized enterprises (SMEs), and providing crisis-management advice to SMEs, especially those led by women. For borrowers experiencing difficulty with repayment, EBRD will adopt “an enabling view” toward restructuring loans. The bank states it will provide funding “as long as it is needed,” doing “whatever it takes” to promote resilience without “compromising sound banking or compliance standards.” This will include disbursing local-currency funds, including to refinance hard-currency loans as local-currency loans. EBRD also has announced that it is financially strong, “stronger than before the global financial crisis of 2008/9” and ready to move forward even through “a severe scenario with a prolonged pandemic.”

Founded in 1991, EBRD seeks to support a “transition to open, market economies, whilst fostering sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in funders of microenterprises and SMEs. With a focus on “the promotion of private and entrepreneurial initiative,” the bank plans to disburse about EUR 8 billion (USD 8.6 billion) during 2020 to grow its portfolio to about EUR 48.5 billion (USD 52.4 billion). EBRD’s shareholders comprise 69 countries plus the EU.

Sources and Additional Resources

EBRD press release
https://www.ebrd.com/news/2020/ebrd-unveils-1-billion-emergency-coronavirus-financing-package.html

EBRD response to coronavirus
https://www.ebrd.com/what-we-do/coronavirus

More news on EBRD
https://www.microcapital.org/?s=EBRD

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