Microfinance in Russia: Broadening access to finance for micro and small entrepreneurs
- S. K. Bossoutrot (2005). World Bank Working Paper, 1-95
- Abstract: In Russia, small-scale entrepreneurship has emerged in response to the collapse of state-ownership and unemployment in the early 1990s. Small businesses typically lack adequate collateral and credit history, making them "unbankable" by the mainstream financial sector. To fund their businesss, micro-entrepreneurs are forced to rely on funds from family and friends, or money lenders. Microfinance institutions of four types have emerged to meet the unfulfilled financing needs of micro-entrepreneurs: commercial banks, specialized NGO-type microfinance institutions, membership-based institutions (such as rural cooperatives and credits unions), and public funds. All four types have enjoyed significant growth in Russia in the past five years, but the industry is still at an early stage of development. Demand appears to far outweigh supply. This paper provides an oxerview of microfinance in Russia to date, presenting industry trends and identifying key challenges to sustainable growth of the industry. Copyright 2005 The International Bank for Reconstruction and Development/The World Bank.
- Theme: Finance
- Keywords: entrepreneur, microfinance, nongovernmental organization, small scale industry, Eurasia, Russian Federation
- Reference type: Journal Article
- Geographic location: Russia, International