OREANDA-NEWS. December 18, 2008. The European Bank for Reconstruction and Development is providing an initial credit facility of US5 million to Belarus’s first dedicated microfinance institution, the Belarusian Bank for Small Business (BBSB), founded by the EBRD and seven other shareholders, which opened for business in Minsk last October, reported the press-centre of EBRD.

The five-year loan will help kick-start the bank’s micro and small business financing activities with an aim to reach out to micro entrepreneurs and small businesses, especially in the regions outside of Minsk, where BBSB plans to open its first two branches in early 2009.

Demand for this type of funding in Belarus is estimated to total US 1.4 billion, of which only 5 percent is currently being met by the EBRD’s local commercial bank partners under a special EBRD small business lending programme.

BBSB will offer loans on a purely commercial basis which will range from as little as US 270 to US 270,000, but will be concentrated on the lower end of the market where there is a strong need for loans of below US 14,000. The maturity of these loans will mainly be up to one year.

The microfinance bank project will provide important credit to the small business sector as a catalyst to support regional development, said the EBRD’s Business Group Director, Financial Institutions, Nick Tesseyman.

The focus on micro and small businesses of BBSB will be a great comparative advantage and will put the bank in an excellent position to grow and significantly contribute to the financial sector of Belarus, added the CEO of BBSB, Seit Devdariani.

BBSB has a capital of US 9.6 million. The EBRD’s seven partners in the BBSB include leading international public and private financial institutions, all of which have global microfinance experience and share a mutual objective of increasing the smallest businesses’ access to finance in Belarus.

BBSB’s creation fulfils a public commitment made by the EBRD. The establishment of BBSB has the full support of the government of Belarus and has resulted from a productive dialogue with the National Bank of Belarus, the country’s central bank. BBSB complements the successful EBRD Micro-lending programme which is run through five Belarus commercial banks.