OREANDA-NEWS. May 19, 2008. 65% of loans under the EBRD Microlending programme for Belarus issued by Belgazprombank, reported the press-centre of Belgazprombank.
 
Belgazprombank continues to play a key role in running the European Bank for Reconstruction and Development Microlending programme in Belarus, Tatiana Avramenko, head of Belgazprombank’s lending and investment department, Ph.D. in economics, said to the BiR reporter.
 
— Mrs. Avramenko, what are the 2007 highlights of SME funding?
 — The bank’s SME credit portfolio almost doubled in 2007. The EBRD Microlending programme underpins our activity as a private business funder. Belgazprombank engaged in this programme in July 2001. Under this programme, loans from \\$1,000 to 300,000 can be issued. We gave out a total of 7,000 loans worth \\$77,5 million. Almost 100% of loans have been repaid.
Our Microlending loan portfolio grew 168% in 2007 when we issued around 3,000 loans worth \\$32 million. Microloans issued to companies in 2007 averaged \\$11.5, and the share of microloans in the bank’s portfolio totalled around 14%.
 
Belgazprombank performed a number of undertakings to promote microloans and make the programme outreach more extensive and efficient.
 
In December 2007, we launched seven low-doc lending products – Firmenny (Special), Prosto Denghi (Just Money), Uspechny Start (Good Start), Tovarny (Commodity), Perevozchik (Carrier), Skory (Urgent) and Overdraft Light. Seeking to optimise loan application processing, we streamlined several business processes. In 2007, the bank continued its proactive efforts to expand into the regions: a microlending department was commenced in the town of Mogilev, and a microlending office was opened in Rechitsa.
 
— The share of microloans in the bank’s loan portfolio is not very meaningful. With this in mind, is it reasonable to participate in this programme?
 
— Along with gains from microloans, this programme benefits the bank in many other ways.
 
Customers who borrow funds through Belgazprombank tend to use the bank’s other services (including wire transfers, foreign exchange, leasing, bigger loans etc.). In total, more than fifty customers opened national currency accounts with Belgazprombank after they raised loans from our head office in 2007.

Also, promoting the SME support programme, Belgazprombank is upholding and strengthening its reputation and brand loyalty on the banking market.
 
— Although the microlending programme progressed favourably, were there any obstacles that impeded the advancement?
 
— 2007 was a transition period in liaison with alterations in the Belarusian private entrepreneurship regulations as set by the Presidential Decree No. 760 as of 29.12.2006. Many private entrepreneurs had to reconsider their business development plans and adjust to the legal alterations or have legal entities incorporated. Under uncertainty, a part of the customers were unable to thoroughly plan their activities so borrowed less in that period.
 
The situation was yet aggravated by a low level of customers’ financial, legal and general economic literacy, this is especially the case in the provinces. Also, regional customers can hardly access quality lending products.
 
— What positive trends in funding small business can you report?
 
— Competition has grown owing to emergence of new banks that focus on funding small and mid-sized businesses and consumer lending. This stimulates banks to enhance their lending practices, develop new technology and products, improve loan terms and reduce application processing timeframes.
 
Banks tend to have more trust to customers and issue collateral-free loans as lending grows and application screening is improved.
 
In their turn, borrowers have more faith in banks preferring to raise funds through banks rather than the private unofficial financial market.
 
— You said that competition between banks was growing, yet Belgazprombank for another time won the ‘Best Entrepreneur 2007’ contest. What is at the forefront of the bank’s success?
 
— Our win was bolstered by a number of factors. Funding small and mid-sized businesses is just one strategic goal of Belgazprombank. We are knowledgeable about specifics of SME and private entrepreneurs’ operation owing to our years-long experience of serving private businesses, which enables us to combine standardized and customized lending practices.
 
We are aware of the problems borrowers face in their day-to-day routines as well as of their financial needs, we can promptly respond to changes in the legislation and entrepreneurial environment and inform out clients of such changes to mitigate negative effect on their activities and their repayment capacity.
 
Our qualified personnel process loan applications in the shortest possible time. With an efficient staff training system used by the bank, even inexperienced employees can arrange loans in their first month of work with the bank.
 
We offer low-doc loans, and established businesses are not required to submit a business plan. For beginners, there is a simplified one-page business plan form.
 
The bank’s employees give free consultations on how to fill in all paperwork, write a business plan and help through the life of your loan. Importantly, resources for funding SMEs are always available. There is a unified interest rate transparent and clear to customers of various levels; no extra commissions or fees are charged. All information about loan costs can be found in the loan agreement. The real cost of loans from Belgazprombank is 4 to 6% lower than with some other banks.

The bank outreach also matters: all regional centres and a number of smaller towns have departments for SME funding.