EBRD MSE/SME Finance Framework: Micro Enterprise Credit Advisors

The assignment was in support of the EBRD Belarus MSE/SME Finance Framework. Belarus Microlending Programme (BMLP) was introduced in Belarus to provide fast and easy credit access to MSEs.

Achievements:

• Implementation of an MSME lending scheme tailored to finance the needs of eligible MSMEs in seven banks of Belarus. Establishment of appropriate organizational structures in new branches and introduction of procedures to assist the branch to efficiently enter this new area of business. Introduction of appropriate credit methodology to analyse credit applications, motivate repayment, monitor credits and enforce repayment as well as appropriate means for marketing the product and building the portfolio.
• “On-the-job” coaching of local managers and loan officers in analyzing and granting loans techniques and in loan recovery methods;
• Regular training seminars for managers and loan officers in analyzing and granting loans techniques, as well as loan recovery methods;
• Overseeing proper credit analysis of borrowers, administering and supervising loans and the monitoring of the lending programme overall, problem loan analysis, administration of collection efforts, administration of write-offs and training, and assessment of local personnel;
• Designing PBs’ advertizing camapaigns;
• Assistance to EBRD in its policy dialogue with the Belarusian Government on MSMEs and access to finance – national MSME legal regulations have been amended to remove obstacles to efficient MSME lending:

- Disbursement and repayment of loans in cash forex;

- Cancellation of mandatory check-up for purpose use of loans up to USD 101,000;

- Setting maturity for micro loans by banks in line with EBRD methodology;

- Accepting guarantees of third parties not secured by collateral;

- Accepting cash forex from legal entities for loan repayment without 30% compulsory sale and stating the source of income, etc.

• 64 microlending units were launched by June 2010;
• Total 400 loan officers were trained, and 122 LOs trained and retained by June 2010;
• Loans disbursed – over 21,000 for the total amount of USD 314 million;
• Management of USD 88.5 million portfolio (as of end-June, 2010) in 64 MSME lending outlets of seven banks, while maintaining high quality loan portfolio (portfolio at risk over 30 days under 2%).