Pic 4^[1] Share of top 30 banks by assets in loans to SME during the quarter

2.3 Improvement of the small business development conditions in Russia

Properly designed technology of SME lending is a key factor in reducing the risks of lending to small and medium-sized businesses. But, at the same time, it is impossible to give clear instructions on the use of certain procedures, as each bank individually choices lending technologies, depending on their lending policy. We can only provide some recommendations based on the experience of other countries, the experience of previous years in Russia and based on the developments of leading experts in the banking sector.

One of the most appropriate tools in supporting small and medium sized business is the provision of guarantees. These guaranties are implemented in the form of certain schemes. Such schemes involve the participation of three parties: the borrower, the lender and the organization - the guarantor. In this case, the lender provides coverage in case a small or medium-sized company - the borrower is unable to repay the loan at his own expense. Guarantees are issued with the retention premium or interest, including risks and various administrative costs. In foreign practice,

^[1] Source: Rating Agency "Expert RA" Calculations according to the Bank of Russia data