OREANDA-NEWS. July 6, 2009. By the present time, 75 banks have submitted applications for participating in VEB’s program of lending to small and medium-sized enterprises, with the total amount of applications being 12.5 billion rubles, said Minister of Economic Development Elvira Nabiullina speaking at a meeting of the Government Commission on the Development of Small and Medium-Sized Enterprises.

“Applications of prospective participant banks are being selected”, said the Minister.

According to her, a key criterion for selecting banks for participating in the program is a maximum interest rate at which banks extend credits to companies.

Banks themselves are to receive credits from VEB at a rate of 10.5-10.7% per annum.

“Banks will compete to reduce a final interest rate for small and medium-sized enterprises”, said E.Nabiullina.

She reminded that VEB’s entire program of lending to small and medium-sized enterprises is worth 40 billion rubles.

According to the Minister, VEB has just started accepting banks’ applications for participating in the program. “We have sent letters to credit institutions, non-government organizations and regions informing them of this program’s beginning”, said E.Nabiullina.

The program of lending to small and medium-sized enterprises through Vnesheconombank provides for each region to receive a guaranteed limit on lending to small and medium-sized enterprises.

No matter whether regional or federal banks will be selected to participate in the program they will be obliged to extend a part of credits in the Russian regions.

 According to Nabiullina, using VEB’s financial resources, banks  are to extend credits to small businesses at an interest rate of  13-14%.

Minister of Economic Development Elvira Nabiullina believes that banks receiving financial resources from VEB should extend credits to small enterprises at an interest rate of 13-14%.

Speaking earlier at a meeting of the Government Commission on the Development of Small and Medium-Sized Enterprises, Elvira Nabiullina reminded that at the moment, applications from the banks that want to participate in VEB’s program of lending to small enterprises are being selected. Under this program VEB is to provide banks with financial resources at an interest rate of 10.5-10.7% per annum, and banks in their turn are to extend credits to small and medium-sized enterprises.

“Banks’ margin should not be more than 2-3%”, E.Nabiullina said to journalists.

Thus, according to her, an interest rate for final borrowers will be 13-14% per annum.

“Nowadays, banks are extending credits to small enterprises at a rate of 20-30% per annum”, the Minister reminded. So, she is sure that less expensive credits will be in high demand by small and medium-sized enterprises.

E.Nabiullina also said that interest rates of banks participating in VEB’s program of lending to small and medium-sized enterprises would be controlled. The program provides for banks to extend credits at minimum interest rates said the Economic Development Minister.

In his turn, Head of Small and Medium Business Support Organization “Opora Rossii” Sergei Borisov is sure that these credits would be in high demand by small enterprises. “They will be able to obtain and repay these credits. They can’t take credits now at a current rate of 27% per annum”, said S.Borisov to journalists.