USD 300 million from World Bank will go to small, medium Russian businesses

The World Bank plans to grant Russia credits of USD 300 million this year to aid development of small and medium Russian businesses. Igor Jurgens, chairman of the Russian Chamber of Commerce and Industry's Committee on the Financial Market and Credit Organizations, discussed the plan Wednesday at a joint meeting of the Saint Petersburg Chamber of Commerce and Industry and the Jurgens committee. Jurgens said the World Bank plan is now being reviewed by Russia's Finance Ministry and the World Bank leadership in Washington, D.C. Under the plan, World Bank funds would be distributed under guarantees from Russia's Finance Ministry. The credits would be repaid from the Russian budget over a period of 17 years from the launching of the program.

The project calls for a tender competition among Russian regions to select 12 or 13 regions in which the credits would be used at a rate of USD 20-30 million per region. Within each of the selected regions, local and Moscow-affiliated banks would be chosen to handle lending under the program. As Jurgens explained, small and medium regional businesses would be eligible for 5- to 7-year loans at 6%-7% interest for carrying out self-development programs. In addition, the borrowers would have access to international specialists and consultants from the Russian Chamber of Commerce and Industry. Jurgens emphasized that the aim is to aid development of accredited institutional mechanisms for medium-term company financing.