Eurasian Development Bank Opened Its First Loan Facility of $70 Million for Bank CenterCredit for Lending to Small and Medium-Size Businesses

The Eurasian Development Bank and Bank CenterCredit (BCC) signed a loan agreement on a five-year loan of $70 million.

Under this agreement, BCC will utilise the EDB loan to:

• support the sustainable development of the private sector in Kazakhstan and Russia, particularly, by financing projects of small and medium-size businesses aimed at launching, modernising, expanding and diversifying their production and services;
• enhance mutual trade and investments by market players from EDB member states, including export of equipment, raw materials, spare parts and other products and services from these countries; and
• assist the manufacture of competitive, higher-value-added products in non-raw-material sectors of EDB member states.

Vladislav Lee, Chairman of the BCC Executive Board, said at a joint press conference that this credit programme will provide an additional impetus for the development of businesses in the real sector of economy. BCC has vast experience of co-operating with both international and Kazakh development institutions, and this syndicate is another sign of trust in BCC.

Yevgeny Prilepsky, Deputy Chairman of the EDB Executive Board, commented that this agreement between EDB and BCC signals to private banks from EDB member states that EDB has the resources necessary for supporting their credit programmes for small and medium-size businesses. This BCC loan facility is EDB’s first experience in providing finance to a EurAsEC economy through a commercial bank. «As for the outlooks for this co-operation, we will work on large projects to support small and medium-size businesses, which are a potent tool for promoting economic growth,» said Prilepsky.

The signed agreement is fully in line with EDB’s credit and investment policies, as co-operation with financial institutions is one of the key areas of the Bank’s business. In summer 2007, the EDB Executive Board approved the Concept of the Bank’s participation in the development of the financial sector in the Bank’s member states. In accordance with this Concept, in order to support national banking systems, EDB will become a stakeholder in commercial banks from its member states and provide them with debt financing and technical assistance. The Concept also envisages that special purpose loan facilities will be made available to commercial banks, particularly, for financing projects in the small and medium-size business sector; agriculture; and foreign trade. The mechanisms and tools employed by EDB for assisting the financial sector in its member states will enable it to strengthen the potential and competitiveness of commercial banks, and to boost their financial and institutional capacity to lend to small and medium-size businesses.