History and Goals

The Russia Small Business Fund (RSBF) was established by the European Bank for Reconstruction and Development (EBRD) in 1994 to provide financial support to the Russian small business sector. Supported by the G-7 countries and Switzerland, the EBRD established a US$ 300 million fund, half of which was funded from the EBRD's own resources and the other half by the G-7 countries. An additional US$ 150 million was approved in July 2001 for continuing and expanding the operations of the RSBF.

• To ensure access to financing, via Russian partner-banks, for micro and small enterprises (MSEs) which often find it difficult to get access to credit through the formal banking system;
• To strengthen the MSE lending capacity of Russian banking institutions, so as to create sustainable long-term access to financing for MSEs.

To implement these goals, the EBRD provides onlending funds directly to Russian partner banks, which in turn make loans to MSEs. The following are RSBF’s current partner banks (including TA-supported and graduated banks):

Absolut Bank, Chelindbank, KMB-Bank (Intesa Bank from January 2010), Masterbank, MDM-Bank, NBD-Bank (Nizhegorodsky Bankirsky Dom), Spurt Bank, Transcapitalbank, Uraltransbank, Centr-Invest Bank, Finka Russia, Forus Bank, Locko-Bank, Probusinessabank, Vostochny Express Bank, Vozrozhdeniye.

RSBF funding scheme

During the early years, RSBF operations were expanding steadily to reach a peak in 1998. By that time, 13 partner banks were working under the framework, introducing and expanding the MSE lending technology to many branches.

The August 1998 financial crisis caused the RSBF co-ordination team to adjust the Programme expansion plans and temporarily suspend the acceptance of applications from potential partner banks. Instead, it focused on developing MSE lending operations through co-operation with existing partner banks, with a particular emphasis on Sberbank and the newly formed KMB-Bank.

Sberbank played a vital role in the Programme expansion due to its broad network of branches all over Russia, which allowed launching the Programme in numerous smaller towns ("satellite towns") from larger project cities.

At the end of 1998, the Russia Project Finance Bank was reorganised into a specialised MSE bank called the Small Business Credit Bank - KMB-Bank, which since its creation has grown into one of the leading institutions in MSE finance, both in terms of geographical outreach and in terms of lending volumes. Since then, KMB-Bank established a network of regional offices in many cities and is further expanding its scope of operations. In 2008, Bank Intesa Sanpaolo Holding International acquired a major stake in KMB-Bank after which the reorganized bank continued as a full-service bank under the new name of Bank Intesa (a closed joint-stock company).

In 2002, we began co-operation with two new regional banks - Chelindbank and Uraltransbank, and early in 2003 - with Sibacadembank. In December 2003, we signed a co-operation agreement with UralSib Bank, one of Russia's largest banks with a widespread network of branches all over the country. Active cooperation with these four banks continued up to 2007 when lending authority was fully handed over to the banks.

From 2006 to 2007, the Programme was implemeted in five new partner banks: Uralvneshtorgbank (which later merged with Sibacadembank to form URSA-Bank), MDM-Bank, Absolut Bank, Transcapitalbank, and Spurt Bank. At the end of 2009, Masterbank joined the programme as a new partner.

During the 2008 financial crisis, when many Russian banks suspended active lending operations and focused on collections, our consultancy was essentially aimed at helping banks meet the challenges of the day and ensuring anti-crisis risk and arrears management of their loan portfolios.

The RSBF concept for the years 2009-2011 focuses on a traditional institution-building approach, targeted consulting support and training for banks both with minor and solid SME lending experience, based on their individual needs.

Since 1994, the RSBF has implemented the small business lending programme in 32 partner banks.

Lending is currently taking place in many cities and towns in almost all administrative regions of Russia, and loans are disbursed to entrepreneurs operating in all sectors of the economy - from kiosk retail to high-tech medical manufacturing.

By the end of 2009, the Russia Small Business Fund had made more than 500,000 loans, totalling over US$ 7 billion.

The RSBF has helped create or protect several hundred thousand jobs.

Given its success in Russia in the field of MSE lending, the RSBF has served an example for other micro-finance programmes: in Bulgaria, Kazakhstan, Kyrgyzstan, Moldova, and Ukraine.

We gratefully acknowledge the financial support provided to the Russian Small Business Fund by the European Union, the USA, Germany, France, Japan, Italy, United Kingdom, Canada, and Switzerland through their donor agencies.