Locko-Bank in association with SME Bank has financed a production company within the strategy of import substitution in Russia

LOCKO continues to expand cooperation with «Russian Bank for Small and Medium Enterprises Support» (SME Bank) lending to small and medium enterprises. Under SME Bank product “SME Duo” Russian company “Clarity” from Nizhny Novgorod received a loan in the amount of RUB 50 million in October 2015. The transaction was aimed to cost recovery incurred under the purchase of equipment for the production of polyvinyl chloride stretch wrap for the packaging of food products in retail networks and food industries.
The basis of the project is the production in Russia of the stretch wrap, which meets the high quality requirements of the global standards under Import Substitution Program. Today Russian market supply of PVC wraps is formed mainly due to imports with the share about 60%. With the advent of domestic player in the industry import substitution share in this segment might increase from current 40% to 80-90% given that today the share of “Clarity” is about 30% as a supplier. In addition, the stretch wrap production in Russia will reduce the additional costs in supply chain which will decrease product price to client.
Lending to SME enterprises is a priority area of LOCKO Bank’s strategy. Implementation of joint projects with SME Bank for more than 7 years promotes the entrepreneurial development in Russia- one of the main drivers of the national economy. LOCKO in association with SME Bank has financed SME enterprises on the amount over RUB 8.9 billion during the joint work under the program.
“SME Duo” product is focused on SMEs’ support in order to restructure or refinance previously raised loans (easing of debt burden) subject to lower interest rate, extend a loan term or change of a loan currency, as well as additional funding attraction, associated with launched projects (if necessary). The Bank is the state resources provider for SME enterprises across the whole country including single-industry towns and regions with difficult socioeconomic situation. As of 01.09.2015 SME Bank’s share capital totaled RUB 19.24 billion, the working assets were RUB 143.41 billion.