Loans and loan guarantee facilities to become more accessible to SMEs
The joint effort by the Bank of Russia and RSMB Corporation to craft changes to SME regulation is nearing completion. Under the proposed amendments, loans to small and medium-sized businesses secured by RSMB Corporation will be included in the calculation of required ratios with a lower risk ratio of 20% instead of 100%, the standard ratio. This will reduce pressure on banks’ capital, making them more willing to accept the Corporation’s guarantees and thereby enabling banks to expand lending to small and medium-sized enterprises (SMEs).
This and other initiatives to increase the availability of financing to small and medium-sized businesses were discussed at a meeting of the SME financing working group. The meeting, held on 25 August, involved the participation of business representatives and development institutions.
The Bank of Russia is also exploring the option of increasing the borrowing limit for SMEs when the risk is assessed on a portfolio basis using banks’ internal methodologies without official statements of borrowers. The move is set to reduce banks’ costs, creating a further incentive to enhance the availability of loans.