The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral institution, recently signed its first transactions providing local-currency funding in Belarus. EBRD extended lines of credit equivalent to USD 10 million each to Belarusky Narodny Bank (BNB-Bank) and Minsk Transit Bank (MTBank). Providing the funding in local currency will allow the commercial banks to offer longer-term lending to small and medium-sized enterprises (SMEs) by removing foreign exchange risk, which is magnified over longer time periods.
Alexander Pivovarsky, the head of EBRD’s Belarus Resident Office, said, “Local currency lending and the development of local capital markets are among [the] main objectives the EBRD has in the region and here in Belarus. Today we are signing two landmark transactions with our partners from MTBank and BNB-Bank, which will pave the way for more similar projects in the future and will bring much-needed resources to domestic SMEs.”
Established in 1991, BNB-Bank has a particular focus on SMEs. Bank of Georgia Group, which operates in five countries, holds 79.99 percent of the institution’s shares, and the World Bank Group’s International Finance Corporation (IFC) holds 19.99 percent.
MTBank, which was founded in 1994, has partners including the IFC, Netherlands-based Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO) and Germany-based Invest in Visions Microfinanzfondz. As of 2018, the bank reports total assets of BYR 1 billion (USD 466 million).
EBRD was founded in 1991 and has 66 shareholding countries – plus the EU and the European Investment Bank – as of 2018. With a focus on “the promotion of private and entrepreneurial initiative,” it invested EUR 9.7 billion (USD 11.2 billion) during 2017 in companies in 36 countries in Eastern Europe, Central Asia, North Africa and the Middle East. Since 1992, EBRD has committed approximately USD 2 billion to 95 projects in Belarus.
By Erik McDonald, Research Associate
Sources and Additional Resources
EBRD press release
https://www.ebrd.com/news/2018/ebrd-provides-first-local-currency-loans-in-belarus.html
EBRD homepage
https://www.ebrd.com/
MTBank background
https://www.mtbank.by/about
BNB-Bank background
https://www.bnb.by/o-nas/o-banke/
Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at http://www.microcapital.org/products-page/.
Similar Posts:
- MICROCAPITAL BRIEF: Uzpromstroybank (UzPSB) Borrowing $15m from EBRD for SMEs in Uzbekistan
- MICROCAPITAL BRIEF: EBRD Loans KICB $7m for MSME Financing in Kyrgyzstan
- MICROCAPITAL BRIEF: EBRD Loans $21m to BMCI of Morocco as Part of Women in Business (WiB) Program
- MICROCAPITAL BRIEF: EU Guaranteeing $113m to Support $490m in Lending by EBRD to MSMEs in Eastern Europe, North Africa, Western Asia
- MICROCAPITAL BRIEF: EBRD Loaning $5m to ING Finansal Kiralama for Leasing for Energy Efficiency, Renewables in Turkiye
