The policy study on credit guarantees in Russia has been carried out under Tacis project on SME support.
The purpose of the study is to provide an overview of past and existing experiences with credit guarantee in Russia, to review relevant experience abroad, to identify the current policy issues of credit guarantee development in Russia and to recommend how the Federal Government can address these issues, in order to create more enabling environment.
Under the Federal Programme of State Support to Small Entrepreneurship in the Russian Federation in 2000-2001, establishment of guarantee mechanisms for loan/investment support to small firms is considered one of the priority directions. Under the Programme, establishment of a national system of guarantees for private investments in the small business sector and their economic protection should be pursued.
On 19 December 2001 the RF State Council approved the Concept of the State Policy of Support and Development of Small Entrepreneurship in the Russian Federation. The Concept sets forth that one of the directions of the financial and credit support to small business will be development of workable mechanism of state guarantees, ensuring risk sharing between the government, financial institutions and small enterprises. This mechanism will be tested in a few pilot regions. The mechanism's effectiveness will be evaluated and proposals for its implementation Russia-wide will be developed.
This indicates that credit guarantee is still to be developed further in the Russian Federation and that the Russian Government has realised it. Several initiatives have been found in different regions, albeit on a limited scale. According to a recent survey initiated by the RC among Regional Funds for Small Business Support, nine of the respondents indicated that they offered credit guarantee to SMEs. In addition, it is known that several of the regional authorities offer credit guarantees on a limited scale. At the Federal Level, the Federal Fund for Small Business Support has commissioned a tender for a study of credit guarantee facility options and limited federal budget funds have been earmarked for development of the instrument.
As international experience shows, it is government that is capable of starting and securing a sizeable credit guarantee facility targeting SMEs. In addition, the legal and regulatory framework for credit guarantee schemes in the Russian Federation shows several shortcomings that need to be addressed to create clarity and enable further development of the instrument.
Table of contents:
Table of Contents
List of abbreviations
1.1 Framework of the SMERUS project
1.2 Purpose of the study
1.3 Credit guarantee; Core questions for sector policy
1.4 What is credit guarantee? Some concepts and definitions
2 Institutional map of SME crediting organisations and credit guarantee providers in RF
2.1 Types of institutions involved in SME crediting and guaranteeing
2.2 Russian Commercial Banks
2.2.2 Overview of some Russian commercial banks that credit SMEs
2.2.3 Other banks
2.2.4 Observations - Development issues
2.2.5 Policy recommendations
2.3 International financial institutions and bilateral donors
2.3.2 Overview of institutions and bilateral donors
2.3.3 Development policy issues
2.4 Public funds
3 Existing experience with credit guarantee in RF
3.1 Past credit guarantee initiatives
3.2 New initiatives
4 Overview of relevant international experience
4.1 Some examples of international credit guarantee schemes
4.1.1 European Commission SME Guarantee Facility
4.1.2 United States SBA
4.1.3 The Dutch Credit Guarantee Scheme (Borgstellingsregeling - BBMKB)
4.1.4 UK-Small Firms Loan Guarantee Scheme
4.2 Sources of expertise that can be drawn upon
4.3 Regulation of credit guarantee
4.4 Mutual guarantee
5 Lessons learned from RF and international experience
6 Legal issues in development of credit guarantee
6.1 Regulatory framework for credit guarantee
6.1.1 Introduction to legal aspects of credit guarantee
6.1.2 Civil and legal regulation of guarantee operations
6.1.3 Budget and legal regulation of guarantee operations
7 Policy recommendations
7.2 Statement of policy
7.3 Prevention of fraud and misuse
7.4 Policy dialogue with banks and improvement of skills
7.6 Enabling legislation
Appendix 1. List of references
Appendix 2. Some relevant links to credit guarantee information