Belarus MSE/SME Financing Facility Extension

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The proposed project is an extension of the Belarus SME/MSE Financing Framework approved by the Bank for USD 25 mln in November 2004 and extended for USD 25 mln in January 2006, which is fully committed. The proposed extension in the total amount of additional USD 50.0 million will support the development of the private sector in Belarus. The key objective of the Project will be to support Belarusian private FIs in the time of the financial crises through various forms of financing. The range of financial products under the Framework will be broadened and will include all types of senior debt (e.g. SME, MSE, mortgages), as well as syndicated loans, subordinated loans and equity investments. The Bank will also consider transactions in the non-bank financial institutions sector. The Framework is expected to have strong transition impact as it will provide support to and contribute to the growth and the increase competition of the private sector banks and non-bank financial institutions. The Framework will assist private banks, to overcome the difficulties of the crises and through the stronger financial position will enable continuation of financing private sector MSMEs. Through EBRD’s engagement in local banks as well as TA focused on institutional building, this will result in a more transparent and competitive banking sector in the country and further progress in corporate governance improvement will be continued through the Board participation. Institution building in PBs will strengthen the quality of services and loan portfolio, risk management procedures both with respect to corporate and retail lending, and liquidity management. Private eligible Belarusian banks. The first bank proposed is Minsk Transit Bank (MTB), an existing EBRD client. MTB, medium-sized private commercial bank, is the 11th largest commercial bank in Belarus. Senior loans (e.g. SME, MSE, mortgages), as well as syndicated loans, subordinated loans and equity investments. USD 50 million. All participating banks (PBs) and activities funded within the framework will comply with Belarus national environmental, health, safety and labour regulations and standards as well as with the ILO Core Labour Conventions. PBs and other FIs shall also incorporate into their credit appraisal process and comply with the EBRD Environmental Procedures for Financial Intermediaries, which vary depending on the nature of lending (i.e. micro-lending, SME lending, mortgage lending, insurance and leasing). Requirements of the Environmental Procedures include, inter alia, compliance with the EBRD Referral and Exclusion Lists, nomination of a member of the senior management responsible for the implementation of the environmental procedures and submission of an Annual Environmental Report. It is envisaged that EUR 1.5 mln will be needed to support the Framework pipeline for the next 2 years. The requested TC will fully complement already existing TCs and will focus on crisis response, risk management, portfolio workouts / loan recovery, institutional building. The intensity, duration and modality of further TC financing will depend on the availability of TC funds. For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants. Minsk Transit Bank: Ms Irina Kuraeva VP business development E-mail: IKuraeva@mtb.minsk.by Tel: +375 17 213 29 19 Address: 6A, Partizanski prospect, Minsk, Republic of Belarus, 220033 Website: www.mtb.by