November 27, 2015 | Cbonds
|Belarusian businesses to benefit from new loan resources, efficient lending procedures|
The European Bank for Reconstruction and Development (EBRD) is extending its Risk Sharing Facility (RSF) of up to US$ 11 million to a long-term financial intermediary Priorbank in Belarus. The Facility will allow Priorbank to share risk in loans provided to domestic corporate clients, including small and medium-sized companies.
Priorbank, majority owned by Raiffeisen Bank International (RBI), becomes RBI’s first subsidiary to join the RSF in the region. Under the RSF agreement, the EBRD and Priorbank will respectively share risk on individual loans, allowing Priorbank to expand its lending to a greater number of companies across the country.
Priorbank, which has maintained its long-term relationship with EBRD since 1997, has robust credit and risk management procedures and in this respect stands out among other financial institutions in Belarus.
Francis Delaey, the EBRD’s Head of Office in Belarus, said: “It is great news for the RSF to have Priorbank on board. We know the quality of their corporate lending well and can comfortably share credit risk of Belarusian customers with Priorbank. The fact that we understand partner-bank’s credit procedures will streamline lending to Belarusian businesses and make the process faster and more efficient.”
The RSF is jointly implemented by the EBRD’s SME Finance and Development Group and the Financial Institutions team. It covers a variety of financial products including senior and subordinated loans, mezzanine capital investments, letters of credit and guarantees available in euros, US dollars or local currencies. Regional banks and leasing companies, eligible to participate in the RSF, are able to offer financing with longer maturities to their clients, most of which are small and medium-sized businesses.
To date the EBRD has made available nearly €265 million to over 133 small and medium-sized companies through risk-sharing mechanisms through 24 partner banks in 10 countries.
The EBRD is a major investor in Belarus. As of 1 November 2015 the Bank had invested €1.7 billion spread over 70 projects, most of which are in the private sector.
|Full company name||Priorbank|
|Country of risk||Belarus|