OREANDA-NEWS. December 17, 2010. The EBRD has agreed to make a senior unsecured loan of 2.345 billion roubles (equivalent to USD 77 million) to Russia’s Orient Express Bank to help expand the micro and small business lending of an institution which throughout the crisis aggressively increased its loans to the sector when most other banks were drastically curtailing theirs, reported the press-centre of EBRD.

The three-year loan to Open Joint Stock Company Orient Express Bank, which has the second largest banking portfolio in the Russian Far East after the State Savings Bank Sberbank,  is being made within the framework of the EBRD’s oldest grassroots lending programme in Russia, the Russia Small Business Fund (RSBF).

This loan will enable Orient Express Bank to extend the maturity of its rouble financing for MSME’s, a sector which has long faced problems in accessing finance but which particularly suffered during the crisis when many banks were forced to cut back lending, said Nick Tesseyman, the EBRD’s Managing Director for Financial Institutions.

Orient Express Bank has an option to fix the interest rate on this loan, the fifth RSBF loan to be made by the EBRD this year in addition to the Bank’s other small business loans.

This EBRD client received a first RSBF loan of 700 million roubles in 2007 and has since increased its portfolio of loans to micro, small and medium-sized (MSME) firms to over USD50 million – with such loans continuing to grow at a rate of over 1,000 a month. The bank’s MSME portfolio quality remained very robust throughout the crisis.

Orient Express Bank has the seventh largest branch network of any Russian bank with 358 outlets in 160 cities and has a particularly strong presence in Eastern Siberia and the Far East region. This places it in a good position to help extend the regional outreach of the RSBF programme in Russia.

A total of 18 Russian banks are participating in the RSBF programme which has since its inception in 1994 disbursed around 570,000 loans totalling over USD8.3 billion to Russian borrowers. The RSBF was launched at the initiative of the G-7 countries which, together with Switzerland, are the EBRD’s co-financiers in the programme. In addition, the European Commission contributes non-refundable grants to the RSBF.

The EBRD sees the RSBF as contributing to social cohesion in Russia where small business plays a vital role in the market economy.