OREANDA-NEWS. November 11, 2009. The EBRD is providing a diversified financing package totalling US81 million for Bank Vozrozhdenie aimed at helping one of Russia’s leading privately-owned banks increase lending to the real sector of the economy at a time when credit markets are still very constrained, reported the press-centre of EBRD.

Under the transaction, the EBRD’s first with this new client, Bank Vozrozhdenie will receive a mix of long-term funds and trade finance guarantees. These will include:

a five-year US 35 million loan for on-lending to small and medium-sized businesses operating in the private sector

a five-year US 16 million loan from the EBRD’s Russia Small Business Fund (RSBF) for on-lending to micro and small enterprises

up to US 30 million in guarantees under the EBRD’s Trade Facilitation Programme (TFP) to help speed up import-export deals involving Vozrozhdenie Bank clients.

This deal inaugurates an important new relationship with a bank playing a systemic role in Russia through its focus on the regions and lending to the grass-roots small businesses which hold the key to Russia’s economic diversification, said Nick Tesseyman, the EBRD Business Group Director in charge of Financial Institutions.

Micro, small and medium-sized businesses (MSME’s) are as a sector at the heart of the EBRD’s mandate but because of the crisis they are suffering from a lack of access to lending, particularly as regards long-term funding.

Bank Vozrozhdenie’s corporate lending is dominated by small loans -- with over 90 percent of all lending being made for sums less than 100 million roubles (equivalent to US 3.3 million).

Small business sub-loans made under both the US 35 million EBRD funding and the US 16 million RSBF loan will have a maturity of up to five years.

Bank Vozrozhdenie, set up in 1991, ranks among the top-30 Russian banks according to Central Bank data. Its shares have been publicly traded since 1991. It has an extensive network branch through 20 of Russia’s 83 regions including 170 offices and more than 660 automatic teller machines.

It is an important player in the Moscow region as well as well as the South and Northwest of the country. It serves over 55,000 corporate clients and over 1.4 million individual ones, offering a broad range of services including deposits, asset management, financing and credit cards.