EBRD promotes local currency lending and corporate governance in Belarus

Local currency lending in Belarusian rubbles

The EBRD and Belarus are joining forces to improve the domestic investment climate and corporate standards, with new initiatives in the area of local currency lending to small and medium-sized enterprises (SMEs) and the commercialisation and governance of state-owned enterprises. The agreements mark an important contribution to the EU4Business objective of supporting SME growth by facilitating local currency lending in Belarus and the broader Eastern Partnership region.

The agreements – outlined in two Memorandums of Understanding (MoU) signed in Minsk on 13 September – come at the same time as the EU is providing a major boost to small businesses in Belarus, with a pledge of €6 million in additional funds over a period of four years for the EBRD’s Advice for Small Business (ASB) programme, part of the EU4Business initiative.

Promoting local currency lending and strengthening domestic capital markets are shared priorities for the Belarusian authorities and the EBRD, as well as EU4Business. “We are very much looking at using our ability to use our grants to support local currency solutions, especially for the SME sector, because we realise that foreign currency lending may be difficult, especially with uncertain economic developments,” said Kateriná Mathernová, deputy director general of the European Commission’s DG NEAR, speaking in an interview with EU4Business.

The signing also confirms the EBRD’s commitment to providing affordable loans to Belarusian banks, microfinance organisations and small businesses under the EBRD’s Local Currency Programme, established to mitigate the exposure of firms in EBRD countries of operations to exchange-rate volatility.

The second MoU on commercialisation and governance is intended to provide a framework for cooperation between the EBRD and the government on promoting better business practices in state-owned enterprises. Further commercialisation is expected to increase productivity, improve overall efficiency and, as result, make these firms sustainable and more competitive.

Since the start of its operations in Belarus in 1992, the EBRD has invested almost €1.9 billion in some 90 projects in various sectors of the country's economy. The EBRD is a major partner in delivering EU4Business programmes, co-funded by the EU, in the six Eastern Partnership countries.