Credit guarantees from regional funds will reach 230 billion rubles in five years - Medvedev
SOCHI. Sept 19 (Interfax) - The total amount of credit guarantees from regional funds will reach 230 billion rubles in the next five years, Russian Prime Minister Dmitry Medvedev said at a plenary session of the investment forum Sochi 2014 on Friday.
"The main 'headache' for small companies is accessible financial resources. The need for long-term loans is now huge. Banks do not always risk giving loans to small enterprises. The guarantee support limit is quickly exhausted, making whole sectors of the economy 'starve,'" he said.
To break this vicious cycle, a decision was made to create a federal guarantee fund, Medvedev said. "I said we would do it back in 2013," he said.
The Credit Guarantee Agency, which has a charter capital of 50 billion rubles, began working in 2014 and nine guarantees were provided in the course of two months. "I hope this practice will expand fairly quickly," Medvedev said.
"We don't know how many guarantees will be needed," Medvedev said. At the same time, he said he expects the total amount of guarantees provided to reach billions of rubles in the next five years, adding that regional funds will provide additional guarantees worth over 230 billion rubles.
According to earlier reports, the non-banking deposit and credit organization Credit Guarantee Agency signed the first contracts on guarantees on loans to small and mid-sized enterprises in late June.
The first contracts were signed with VTB 24 and Sberbank on two loans provided to regional enterprises worth 22 million rubles and 105 million rubles on a loan to the Rehabilitation Kinesitherapy Center in Chita and a loan to OOO Lukhovitsky Crane Plant.
Galina Izotova, the head of the agency, then said there were plans to increase the number of guarantees and the size of amounts provided by the agency to small and mid-sized businesses in Russia from 51.2 billion rubles (986 loans) in 2014 to 346.6 billion rubles (6,256 loans) in 2019.