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30 Aug 2018

EBRD lends Br20m to MTBank, BNB Bank each to finance SMEs

MINSK, 30 August (BelTA) – The European Bank for Reconstruction and Development (EBRD) has lent Br20 million to MTBank and BNB Bank each. The relevant agreements were signed in the EBRD representative office in Belarus on 30 August, BelTA has learned.

The money will be channeled into financing micro, small and medium businesses. These are the first EBRD loans in Belarusian rubles. No synthetic conversion mechanisms, which were used for such loans in the past, have been used this time.

Alexander Pavlov, Head of the EBRD Financial Institutions Sector in Ukraine, Moldova, and Belarus explained that the loans had been granted for a period of up to two years and will be spent only in the real economy sector. Granting such loans has become possible thanks to the development of the country’s economy, GDP growth, falling inflation, stable currency exchange rates, and dynamic cooperation with Belarusian authorities.

The loans came from international investors. The EBRD raises monetary assets in Belarusian rubles and channels them into Belarus’ domestic market. “Thus, we are opening up the Belarusian currency market a bit. Several investors have been found, who believe that the Belarusian ruble is a sufficiently stable currency and will generate profit over the course of two years with a certain market-based interest rate,” said Alexander Pavlov. “We confirm the adherence to supporting business development in Belarus. We hope that these loans will be a signal to other financial market players, indicating that loans to small and medium businesses are profitable.”

MTBank Chairman of the Board Andrei Zhishkevich noted the timely nature of the EBRD’s loans in Belarusian rubles. “The money will allow MTBank to step up lending in national currency for projects of micro, small, and medium businesses. Within the framework of the existing agreement as part of the trade facilitation program our clients have access to instruments to structure deals in foreign currency,” he added.

In turn, BNB Bank Director General Konstantin Tsereteli underlined that the deal was a token of investors’ trust in the Belarusian ruble and Belarus’ financial market, confidence in its future development. “We’ve already prepared a list of clients, who are interested in long-term loans in Belarusian rubles and are ready to use this instrument as soon as possible,” said the executive.

The Belarusian government and the EBRD signed a memorandum of understanding in September 2017 to promote loans in the local currency and reinforce the domestic capital markets. The memorandum confirms the EBRD’s commitment to providing affordable loans to Belarusian banks, microfinance organizations, and small companies in the national currency as part of the EBRD’s program. The program has been created to minimize vulnerabilities of companies in the countries the EBRD operates in with regard to volatile currency exchange rates.

Belarus has been a member of the European Bank for Reconstruction and Development since 1992. Since it started working in Belarus, the EBRD has invested over €2 billion in 95 projects in various branches of the national economy.

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