OREANDA-NEWS. June 03, 2010. The EBRD has signed a 480 million rouble (equivalent to USD16 million) five-year loan to DeltaLeasing to help it meet revived demand, particularly in Siberia and the Russian Far East, for rouble-denominated lease finance as the country emerges from the crisis, reported the press-centre of EBRD.    

Leasing was one of the financial services worst affected by the financial and economic turmoil in Russia as enterprises’ demand for new equipment and vehicles collapsed. It was also one of the few not to have received government assistance. This long-term loan is the EBRD’s first to the Russian leasing sector since the crisis began.

The loan will enable regionally-focused DeltaLeasing to respond to increasing demand from its traditional client base of micro, small and medium-sized businesses (MSMEs). This new demand is in itself an encouraging sign of recovery by the real economy in Russia.

For the MSME sector, leasing remains a vital source of financing for fixed asset investments. Long-term credit has been in very short supply for such companies in Russia which often find it difficult to provide the kind of track records, financial reports and collateral normally required to obtain bank loans. Leasing provides an economically viable alternative.

Leasing was one of the fastest expanding segments of the financial industry in Russia before the crisis with average annual growth exceeding 50 percent for the last three years.

Leasing financed 14 percent of all capital investments in Russia in 2008 and accounted for 1.73 percent of Gross Domestic Product. The equivalent score in more developed economies are up to 30 percent of capital investments and 5 percent of GDP.

Access to rouble funding is an important factor in DeltaLeasing’s ability to meet the strong demand for local currency financing which had become unavailable during the crisis.

A minor part of the EBRD’s local currency loan is also ear-marked for strengthening DeltaLeasing’s balance sheet by helping it reduce foreign currency exposure.

Although DeltaLeasing’s portfolio is still heavily concentrated in the east of the country, the company is also active in the Urals' industrial heartland and has recently gradually been expanding its presence in the west, south and centre of Russia. Established in 1999, the company has been a client of the EBRD since 2004.