BSTDB Signs First Loan Agreement Under Its SME Support Program for the South of Russia
In accordance with the terms and conditions of the US$ 12 million Credit Line facility approved by BSTDB for the support of Small and Medium sized Enterprises (SMEs) and expanding businesses in southern regions of Russia - Stavropol, Krasnodar and Rostov -the first loan of up to US$ 500,000 will be extended to the Center-Invest bank (Rostov) for the period of 3,5 years.
The Center-Invest bank would sub-lend financial resources starting from US$ 30,000 to Russian SMEs in the above mentioned regions for viable projects involving purchase of capital goods, construction of building and auxiliaries, import of inputs for processing, and leasing. SMEs with less than 200 employees and assets not exceeding US$ 2 million are eligible to use the facility.
The BSTDB Credit Line facility of US$ 12 million is opened for participation of Russian banks registered in the mentioned southern regions of the country, which would meet the BSTDB eligibility criteria. The size of loans, which can be extended by BSTDB to the selected banks for on-lending operations to SME borrowers, may vary from US$ 100,000 to US$ 3 million for the period of up to 5 years.
On its SME Support Program in Russia, BSTDB cooperates with the Ministry of the Russian Federation for Antimonopoly Policy and Support to Entrepreneurship, and the Federal Fund for Small Business Support under a Memorandum of Understanding signed in 2000. The Memorandum envisages cooperation in providing loans and co-financing, as well as facilitating investments, foreign borrowings, and development of a system of guaranteeing credits to Russian SMEs.
The SME sector is one of the BSTDB major priorities, which accounts for 25% of the Bank's operations. In 2000 BSTDB together with IFC of the World Bank Group, USAID, SEAF and a number of reputable international investors established a US$25 million Trans Balkan SME Equity Fund for Balkan countries; the Bank extended USD 10 million to support Turkish SMEs. Besides, SMEs are the main target group for the BSTDB Trade Finance Program.