The Overseas Private Investment Corporation (Opic) has committed to provide a US$30mn loan to
- Russia’s leading micro and small finance bank, Small Business Credit Bank (KMB Bank), enabling KMB Bank to make small loans to micro, small and medium-sized customers investing in Russia.
Sponsored by the Soros Economic Development Fund (SEDF), the Opic loan will be used for short and medium-term financing of projects involving investment in industrial and production facilities for its micro and small-sized customers. KMB Bank will also offer working capital financing as well as financing of production equipment. KMB’s loans will range in size from US$200 to US$300,000. SEDF is a significant shareholder in KMB Bank.
In addition, KMB management will provide intensive on-the-job training for loan officers, as well as formal training seminars and workshops.
Watson notes that the project will generate US$1.9mn in average annual tax revenues for the Russian government during its the first five years of operation and 90 permanent local jobs, all of them professional or technical.
“In addition to its direct benefits, this project will stimulate the local economy by providing credit to small businesses and entrepreneurs,” Watson says. “We are pleased to work on a project which will enable micro and small banking customers to play an important role in the development of Russia’s economic infrastructure.”
KMB is Russia’s leading small business banking institution with a current loan portfolio of US$125mn.
SEDF is a not-for-profit organization headquartered in New York. SEDF’s primary focus is mitigating the social consequences of economic reform in central and eastern Europe and the CIS, by supporting small and medium business development through capital investment and the provision of loans and guarantees.