OREANDA-NEWS. July 1, 2009. Vnesheconombank is to increase support for small and medium-sized enterprises by 10 billion rubles to 40 billion rubles rather than 30 billion rubles as it was planned before, Mikhail Kopeikin, Management Board Member, VEB Deputy Chairman, Board Director of the Russian Development Bank said.

“In the near future, Vnesheconombank’s charter capital is to be increased by 100 billion rubles. Out of them 10 billion rubles will be committed to the Russian Development Bank’s charter capital”, he said adding that besides these funds another 30 billion rubles of budgetary funds will be committed to the program of supporting small and medium-sized enterprises.

 The state was planned earlier to earmark 30 billion rubles for supporting small and medium-sized enterprises – 20 billion rubles for lending itself and 10 billion rubles to be committed to the Russian Development Bank’s charter capital.

“Thus, we expect the total amount of funds to be committed for supporting small enterprises through VEB and its subsidiary banks to be about 40 billion rubles”, said M. Kopeikin.

He said that at present a Regulation of the Government is being prepared subject to which 30 billion rubles would be deposited with Vnesheconombank up to December 2017 at a rate of 8.5% per annum. And upon transferring them to the Russian Development Bank, VEB is not going to charge any margin.

According to the plans, partner banks that are in the long run responsible for financing small and medium-sized enterprises are to receive funds from the Russian Development Bank at a rate of 10.5% per annum which is lower that the refinancing rate.

Mr. Kopeikin said that a proposal to participate in the program of supporting small and medium-sized enterprises had been sent to 248 banks. Within a week after announcing the start of accepting their applications about 40 banks submitted applications.

He said that it was an absolutely new program. It is based on the mechanism for financing portfolios of credits to be extended to small enterprises which are now being formed by regional partner banks of the Russian Development Bank. Banks will be able to refinance loan portfolios intended for small enterprises at the Russian Development Bank within regional limits (from 100 to 800 million rubles).

Now VEB together with the Russian Development Bank, the Russian Central Bank and in cooperation with Deloitte & Touche CIS consultants are exploring the possibility of raising the Bank of Russia’s funds to increase the amount of financing to support small and medium-sized enterprises.

“ We can produce a significant multiplier effect of more than 2”, said M. Kopeikin adding that only through using the funds to be committed we can increase the amount of the state’s support to more than 80 billion rubles.

“Given that VEB’s subsidiary banks have loan portfolios worth about 25 billion rubles for small and medium-sized enterprises, the amount of the state’s support might exceed 100 billion rubles in 2009”, he added.