EquipmentLeasingSites.com

Home Search Equipment Leasing EBRD Loan Supports John Deere Leasing in Russia

EBRD Loan Supports John Deere Leasing in Russia

Written by Laura S. West    Wednesday, 21 December 2011

The European Bank for Reconstruction and Development (EBRD) has agreed to provide Deere & Co, one of the world's leading manufacturers of agricultural equipment, with funding to help set up a new leasing company in Russia. Under the terms of the agreement, signed at the EBRD's annual meeting in Astana, the EBRD will provide a loan of up to Rb4.7 billion (Eu114 million). The five-year loan represents the first part of a planned EBRD financing package for the project. The project is designed to help Russian farmers access the credit needed to overcome one of their most critical problems - the shortage of modern and efficient farm machinery. The venture will also target the forestry and construction industries but renewing farm equipment is likely to account for most of the business. Access to credit remains one of the main problems faced by farmers in Russia where 30% percent of machinery purchases are still paid for in cash. The new leasing company will provide an alternative form of finance where traditional bank loans are not available. The products offered by Deere & Co's Russian leasing subsidiary should mainly interest medium-sized customers whose equipment is in urgent need of renovation, typically mid-sized former collective farms which have in the past few years turned rofitable. At present, Western-style machinery is used on less than 25% of Russian farm land. Russia is expected to be one of the fastest-growing markets for farm machinery in the next decade, hence the logic for John Deere to offer leasing solutions to its customers, EBRD's first vice president, Varel Freeman, said at the loan signing ceremony. EBRD teams with Raiffeisen Leasing Bulgaria In another leasing development in CEE, the EBRD has signed a Eu20 million ($28.4 million) loan to Raiffeisen Leasing Bulgaria, a subsidiary of Vienna-based Raiffeisen Bank International (RBI). The loan will be onlent to Bulgarian small and medium-sized enterprises (SMEs) by Raiffeisen Leasing Bulgaria. Specifically, the proceeds of the loan will be used to provide leases to local companies to finance capital investments for the expansion of their businesses. Such capital investments include the acquisition of equipment, light commercial vehicles, trucks and trailers, as well as cars for commercial use. SME financing accounts for more than 40% of Raiffeisen Leasing Bulgaria's portfolio. This new EBRD loan is the third such financing deal with Raiffeisen Leasing Bulgaria, bringing the total loan amount extended to the company to Eu40 million. Dobromir Dobrev, CEO of Raiffeisen Leasing Bulgaria, comments: "Raiffeisen Leasing Bulgaria is a strong partner for local small and medium-sized businesses. Thanks to this credit line, we will further support local small businesses by providing them with favourable financing conditions."

Last Updated ( Wednesday, 21 December 2011 )