Банкеръ Weekly



Our experience shows that the loans extended to small and medium-sized enterprises (SMEs) are perfectly serviced and returned before the set term. Therefore, we are simplifying the procedures for standardization of documents and this makes the credits cheaper, Momchil Andreev, Executive Director of Raiffeisenbank (Bulgaria) announced. The bonus for prompt clients is a 30% discount from the commission for management of the second loan a certain firm would eventually draw from the bank. The work for approving a credit of USD5MN and USD100MN is one and the same and the bank's expenses are the same in both cases, the banker specified. In addition to the interest rate and the risk surplus, the price-formation of credits includes also a commission for management, which is usually 1% of the loan's amount. The preference, granted by Raiffesienbank to its clients when drawing a second credit - Initiative (a product, especially developed for SMEs) - is a discount of the commission for management from 1% to 0.7 per cent. The aim is to furnish prompt customers with better terms and encourage them to remain clients of the bank. They are also entered in a special register and an official certificate is issued to them, which confirms that they have paid off their Initiative microcredits before the set term. The first two certificates of that kind were presented on May 20. One of them went to the Haskovo-based ВА СС Commerce OOD - a producer and dealer in meat products - which has been a client of Raiffeisenbank (Bulgaria) since March 2002. Johan Jonah, Chairman of the bank's Management Board, presonally handed the certificate to the company's Manager Vassil Mitev. The firm had drawn a credit of EUR30,000 which it used for turnover capital and repaid it before the set term. The company Inikom OOD of Stara-Zagora produces dairy products under its own trade mark Kukeri and has been a client of Raiffeisenbank (Bulgaria) since March 2002 when it drew a loan of EUR40,000 and paid it back before the set term. Momchil Andreev handed the second certificate to Stefan Michalov, Manager of Inikom OOD.The amount of deposits held by small firms in Raiffeisenbank (Bulgaria) exceeds the total amount of credits which the financial institution extends, insiders claim. The expansion in crediting is mostly due to the additional financing of the bank's regular customers and the attraction of new big and medium-scale enterprises as clients. The loans are allocated under the Microcrediting Programme with the support of the European Bank for Reconstruction and Development (EBRD) and the European Union. More than 40% of the credit line launched by the EBRD have already been utilized and some of the clients have succeeded to pay off their loans.More than 70% of the customers of Raiffeisenbank (Bulgaria) are not from Sofia. In the end of 2002 the financial institution was the biggest creditor of state-owned enterprises in Bulgaria and rated third in corporate crediting with 8.5% market share. In end-March its credit portfolio totalled BGN404MN, marking a 54% increase from the same period of the previous year.

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