MOSCOW, March 22, 2016 - On March 15, 2016, SME Bank and the World Bank in Russia hosted a workshop on Securitization of Small and Medium-sized Enterprises' (SME) Assets: Challenges and Prospects. The objective was to discuss the status of the market for SME securitization and the latest trends in the Central Bank of Russia regulation of these transactions, as well as international experience in SME securitization, and specific features of assigning credit ratings to such transactions.
The workshop was hosted by the World Bank Country Director and Resident Representative in Russia Andras Horvai, First Deputy Chairman of the Board and member of the SME Bank Board Denis Ursulyak, Finance and Markets Global Practice consultant James Hammersley, Head of the CBR Chief Department of Microfinance and Financial Inclusion Methodology Mikhail Mamuta, and brought together representatives of top law firms, AKRA rating agency, and more than 20 Russian banks.
“The World Bank Group believes it is important to discuss the prospects for SME development in Russia, as currently SMEs account for only 20 percent of GDP and 25 percent of the employment – much lower than in many other countries where it exceeds 50 percent,” said Andras Horvai, the World Bank County Director and Resident Representative in Russia. “We will be happy to share international experience in addressing the challenges constraining the development of financial services for SMEs.”
“Given contraction of SME lending by banks, promoting SME securitization is a critical part of our work as it could help to grow SME financing volumes by attracting private investments, ease pressure on the government budget, and facilitate the development of standardized lending terms,” stressed Denis Ursulyak during the workshop. “We see a huge potential for promoting securitization today, inter alia, by tapping into the World Bank’s global experience in securitization.”
He also stressed that the new refinancing instrument would enable banks to grow their SME loan books and thus lower borrowing costs for businesses. As to banks, the biggest economic factor motivating them to securitize SME portfolios would be generating extra liquidity and easing capital pressures.
The SME Bank sees its role in supporting pilot transactions and in building an SME securitization platform for medium-size and small banks, and in putting in place an enabling regulatory and legal environment in coordination with the SME Corporation.