Small and medium-sized enterprises (SMEs) in Britain are to benefit from a new USD50m finance facility which will be established to help British firms seeking to export goods to Russia, the UK’s Department for Business, Innovation & Skills (BIS) announced on Wednesday.
A Memorandum of Understanding (MOU) for the finance facility has been signed by UK Export Finance (UKEF) and Russian bank, Alfa Bank during a two-day trade visit to Russia led by Business Secretary Vince Cable, in conjunction with the Government’s launch of its ‘Exporting is GREAT’ campaign
Under the MOU, UKEF and Alfa Bank will collaborate in identifying Russian buyers that are looking to secure export contracts with UK companies, in order to boost the level of UK exports to the Russian Federation. The proposed facility is expected to be available for export contracts valued at more than GBP1m and will be the first under the umbrella of UKEF’s Direct Lending Scheme. The facility will enable UKEF to provide funding to Alfa Bank, which will then be able to make medium-term loans to Russian businesses buying goods and services from UK exporters.
The Alfa Banking Group is headquartered in Moscow, Russia. Its branch network covers the Netherlands, the US and the UK as well as Russia. The private bank was reported as serving over 82,000 corporate customers and 8.9 million retail clients at the end of last year.
UKEF is a ministerial department, supported by Export Guarantees Advisory Council. The UK export credit agency helps exporters and investors by providing credit insurance policies, political risk insurance on overseas investments and guarantees on bank loans.
UK Trade Minister Lord Green commented: “Our exports to Russia have nearly tripled since 2002 and it is set to be the largest market for UK goods exports outside of the US, the EU and China. Today’s trade delegation aims to identify and secure further opportunities for UK exporters.
“Making it easier for British firms to export must be a priority for rebalancing the economy. But exporting is not just for big corporates or the tech sector, and that is why we have launched the new ‘Exporting is GREAT campaign’, focused specifically on small and medium-sized businesses.