EBRD weighs support to SMEs, micro enterprises in Russia

Microfinance Focus, Nov. 27, 2009:  The European Bank for Reconstruction and Development (EBRD) is investigating new ways to fund micro, small and medium enterprises (MSMEs) in Russia, including a dedicated MSME funding facility.

This is part of the EBRD’s new strategy for Russia to promote diversification in the “real” economy and support the transition towards a knowledge-based economy to lessen the economy’s dependence on natural resources, according to the EBRD.

“Key to achieving this is the role of micro, small and medium-sized businesses (MSME’s), a sector with huge potential for increasing Russian productivity, creating new jobs and promoting economic diversification,” the bank said in a statement.

The EBRD will seek new ways of supporting and financing the sector, including through the development of a dedicated MSME facility with the Russian government and a joint programme with Vnesheconombank to fund MSME’s through financial intermediaries.

The new strategy over the next three years will give priority to economic diversification, supporting the real sector of the economy, promoting energy efficiency, strengthening domestic capital markets and funding infrastructure renewal, it stated.

“These priorities reflect the Bank’s views on how it can best help Russia confront and mitigate the effects of the current crisis in the short term, as well support a post-crisis recovery in the medium term,” said EBRD statement.

EBRD has invested more in Russia than any of the other 29 countries in which it operates. Russia accounted for nearly 31 per cent of the EBRD’s total portfolio as of  2008.

© 2009, Microfinance News. All rights reserved. 2008-09