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Banks issued soft loans worth $698 mln to support employment

Over the week the amount of issued loans increased by 18.3 bln rubles

MOSCOW, May 23. /TASS/. Russian banks issued interest-free loans worth 50 bln rubles ($698 mln) to businesses to support employment as of May 22, the Economic Development Ministry said in a press release on Friday. Over the week the amount of issued loans increased by 18.3 bln rubles ($255 mln), the ministry said.

As of May 14, interest-free loans were issued in the amount of 31.7 bln rubles ($442 mln) under 12,900 contracts.

"According to monitoring data for 39 banks that have signed an agreement with the Economic Development Ministry, as of May 22, 50 billion rubles were issued under 18,200 contracts for interest-free loans to support employment," the ministry said.

Currently, the Economic Development Ministry has already received 64 applications from banks for participation in the program of preferential financing, the ministry added.

Earlier the Russian authorities launched a program of subsidized loans granted at 0% rate for six months for small and micro enterprises from the affected sectors of economy. Later, the program was expanded to medium and large enterprises.

Loans for systemic enterprises

Russian banks, also approved loans worth 33 bln rubles ($461 mln) for 32 systemic enterprises as of May 22.

"According to data on May 22, 32 systemic enterprises with 859,000 employees were able to get these funds. The average loan rate is 3.57%, the average loan size was about 1 billion rubles ($13.9 mln)," the statement said.

The Economic Development Ministry reported that preferential loans were received by enterprises in such industries as metallurgy, mechanical engineering, transport and furniture building, and the production of socially essential goods.

Currently, five banks are involved in the program: Sberbank, VTB, Gazprombank, Sovcombank and AK Bars Bank.

On May 19, at a meeting with President Vladimir Putin on the implementation of measures to support the economy and the social sector, Economic Development Minister Maxim Reshetnikov said that banks issued 20 loans in two weeks to systemic enterprises under a loan program for working capital replenishment. At the same time, he specified that these are loans, that had already been granted and banks were considering another 300 applications. According to him, the average loan interest rate for enterprises is 3.8%, the rest is subsidized from the federal budget.