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To support development of the private sector in Belarus and facilitate entrepreneurs access to finance, the European Bank for Reconstruction and Development (EBRD) has launched a framework for micro, small and medium-sized enterprises. The first two signings are a US$6mn loan to Belgazprombank and a US$10mn credit line for Priorbank.


Micro and small enterprises have limited access to finance in Belarus today, mostly via an existing EBRD credit line. Traditional microfinance providers are non-existent and state-owned banks have fairly small appetite to work with this type of consumers. The EBRD framework, worth up to US$25mn, is designed both to support the development of private banks and increase the availability of finance for small business. Loans under the framework are strictly for on-lending to private companies.


Mike Davey, EBRD country director for Belarus, says it is of paramount importance to support the development of banks that have the potential to become key providers of funding in the private sector. The programme will also focus on expanding into less-populate regions of Belarus, where capital constraints are even more acute than in the capital Minsk.


The new initiative builds on a successful previous credit line for Belarusian micro, small and medium-sized companies, under which more than 1,360 companies (including 1,272 small enterprises) were financed with a total of US$72mn.


The EBRD’s activities in Belarus have been limited due to remaining concerns about the pace of transition in the country. In its latest strategy for Belarus the EBRD identifies the support of small enterprises as one of its priorities. As of mid-2004 the bank has signed projects worth €
159mn in Belarus.