SME support initiatives discussed at Bank of Russia

Further securitisation of SME credit portfolios, including multi-originator securitisation, could become a key instrument for attracting market funding for small banks, which will help reduce interest rates for end borrowers. This was the message of the BoR Governor, speaking at the regulator-hosted meeting on 13 February of OPORA RUSSIA (the Russian non-governmental SME organisation) and SME development institutes. Such meetings, which traditionally take place early in the year, are focused on SME financing development.

In her opening remarks, Elvira Nabiullina said: ‘Ensuring better access of SME to financial services is a Bank of Russia priority, given the importance of the segment for national economic development’.

The potential option of accounting for all factors behind an SME entity’s business processes and solvency, in addition to the standard assessment of financial statements / business reporting, was discussed by representatives of banks and SME development institutes with regard to banks making loss provisions.  This is of particular importance for businesses in the digital economy.

It was concluded that the Bank of Russia would, jointly with the banking community and SME development institutes, explore cost-cutting opportunities in SME loan extension, in a move to also downgrade end interest rates for borrowers.

Separately, Elvira Nabiullina proposed to specifically look into alternative SME capital raising options, e.g., the use of stock market instruments, as well as crowdfunding opportunities.