Extension to IBP and Strenghtening of SME Loans Procedures

TC Project

 

Summary description This TC project was aimed to develop lending practises of SME projects of participating banks (PB) and to strengthen the loan appraisal and credit approval processes, as well as to enhance loan officers’ credit skills. Under this assignment a consulting team had to establish the processes for the assessing and monitoring of the EBRD funded SME projects. At the same time, this assignment shall also contribute to the overall institution building in PBs. The project is part of the EBRD $25 million MSME Framework Facility (the "Framework"), which was established in 2004. A further extension for $25 million was approved by the EBRD in January 2007 to support Belarusian banks with a focus to MSME lending. As of end 2008, three new participating banks joined the EBRD MSME Programme – Minsk Transit Bank, Belrosbank, Reconversion and Development Bank (RRB).   The objectives of the assignment are to provide assistance and training to the PB so that:
  • the credit process and credit portfolio management procedures in MTB continue to strengthen and the credit procedures are developed to take into consideration the specific needs of the SME finance;
  • the credit analysis and sales skills in PB improve;
  • the overall credit performance of PB continues to strengthen;
  • the corporate governance in PB continues to improve;
  • all necessary due diligence on the borrower and the projects are carried out;
  • relevant documentation are appropriately reviewed, necessary projections, including sensitivity analysis, are correctly prepared and financing is extended against cash flow rather than collateral only, and
  • all projects are in line with the EBRD credit and environmental guidelines.
    Justification and purpose of the TC The EBRD $25 million MSME Framework Facility for Belarus dated 2007 has been almost fully disbursed. The new Framework for the amount of $50 million is under preparation to finance the existing and new participating banks. It is essential that the skills in SME lending including loan appraisal, credit approval processes, credit skills in PBs are streamlined. At the same time, this assignment will also contribute to the overall institution building in PBs. This will greatly increase chances of the success of the Framework and add to the transition impact.  

The assignment is aimed to contribute significantly to the quality of on-lending of EBRD funds through PBs as well as to be a good institution building experience for PBs, which will give the opportunity to improve the SME lending and risk assessment skills.

Countries of operation
BELARUS
TC Sector
SME Support
Commitment stage name
Closed
Euro committed
191,544

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