Credit Guarantee Agency supports the creation of a single institution to support small and medium business
Head of the Credit Guarantee Agency Galina Izotova welcomes the idea of creating the agency to support small and medium business on the basis of the Credit Guarantee Agency. According to her, there is a need to createsuch kind of institution where the entrepreneurs could receive all the information about the support he can get for implementing their business projects.
“The decision on the model is being elaborated now. We expect the list of instructions following the State Council. But it is important to note today that a single body should be created. The world experience of leaders in the development of small and medium business confirms this”, - said Galina Izotova. However, the Accounts Chamber of the Russian Federation expressed doubts about the effectiveness of a new agency creation. This kind of concern is based onstatistics. Thus, in 2014 the Credit Guarantee Agency issued 212 guarantees, while according to the planapproved by the government, the Agency should have given 990 guarantees by January 1, 2015. So this means the agency has not reached the target.
According to Galina Izotova, one of the key reasons why the Agency failed to implement the plan in full is the deteriorating economic situation in the country and a sharp rise of the key rate by the Bank of Russia, which significantly reduced the volume of lending to business. “The business plan has been formed since last year’swinter and was approved by the Ministry of Economic Development of the Russian Federationlast May. Unfortunately, it did not take into account the macroeconomic changes, the decline in business lending by banks, and did not consider external and internal changes in the economy” - explained Galina Izotova.
Nevertheless, the head of the Credit Guarantee Agency is looking at the situation with a certain degree of optimism, because after a sharp rise of the key rate on December 16 in a very short period of time they managed to restructure their work in March and reach the planned volumes.
Moreover, in the near future the Credit Guarantee Agency intends to launch a new program of lending to small and medium business. A number of banks having received the Agency’s guarantee will receive resources from the Bank of Russia at a rate of 6.5% per annum. This will enable them to issue loans to business under Agency’sguarantee at the rate not exceeding 11% per annum, which will also contribute to the increase in the number of soft loans for small business. The Agency together with the Ministry of Energy of the Russian Federation is elaborating a program to provide loan guarantees to companies that increase the energy efficiency of enterprises. The Agency is also working on joint programs with the Ministry of Agriculture of the Russian Federation and the Ministry of Industry and Trade of the Russian Federation. It is planned to launch a program to support microfinance institutions under which for the first time there will be a mechanism of securitization under the loan portfolios of these non-bank institutions in Russia.
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