Russian Banks Give SMEs 3% Less in Loans

10 April 2017 (14:20)

UrBC, Moscow, April 10, 2017. Russian banks issued 5.3 trillion RUR worth of loans to small enterprises last year, which was 3% less than one year previously, Kommersant refers to Expert RA as stating.

In 2015, however, the drop was much more noticeable and came to as much as 28% against the year 2014, with the loan book plummeting by 9%, down to 4.5 trillion RUR (a three-year low).

It is reported that, were it not for the special preferential terms lending programs such as Program 6.5% (the Central Bank lends to other banks at 6.5% a year, the banks then lend to medium and small enterprises at 9.6% and 10%, respectively), the overall amount of issued loans would have gone down by 5% rather than just 3%. The share of past-due payments comes to 14% of the overall SME loan book, which is quite a bit.

The forecast says the market might overcome the downward trend this year, with the loan book up by 5%, to 4.7 trillion RUR. In the worst case scenario, the dropping oil prices and the rising key financing rate will result in the loan book shrinking by 5%, down to 4.2 trillion RUR.

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