Russian banks concerned about financing small businesses - 6 March, 2003

The Association of Russian Banks has worked out and submitted to the government a number of proposals on decreasing the rate of banking credits to small businesses, Association President Garegin Tosunyan declared at a round table meeting devoted to problems of financing small businesses. He specified that these proposals concerned the development of the procedure on refinancing small businesses by the Central Bank, access of commercial banks to the resources of the Pension Fund and social insurance funds, guarantees to commercial banks that credit small businesses and some other questions.

"It is necessary to work out the credit and monetary policy aimed at decreasing interest rates of credits to small enterprises. It concerns short-term as well as medium-long term and long-term credits", Tosunyan stressed.

He noted that the current demand of small businesses for credits was $7bn, while only $1bn in credits had been really attracted. According to the association, only 2-3 percent of small businesses use external financial resources.