Taking into account the importance of the sector of small and medium-sized enterprises for the Bank’s member states, one of the main lines of activity of the IIB is the implementation of projects jointly with leading international and national financial institutions for the purpose of supporting the SME sector.

The IIB has determined the following SME activities financed on a priority basis:

• Innovation, including but not limited to the support of high-tech start-up projects;
• Modernization, including but not limited to technological upgrades;
• Saving resources and energy efficiency;
• Projects aimed at mutual exchange of experience and technology among the IIB member states and creation of new jobs thereby.

Due to differences in the criteria applied in the IIB member states for the determination of whether an economic agent belongs to the SME sector, in the course of the determination of parameters of proper use of the funds the IIB adheres to a case-by-case approach in each country.

Provision of financing through intermediaries

In the context of the implementation of the programme of support of small and medium-sized enterprises the IIB basically uses a two-level loan scheme that involves the financing of SME through a network of agents (financial intermediaries) — partner commercial banks, leasing companies, etc.

The IIB carefully chooses financial intermediaries that must carry on financial activities in an IIB member state, have a good business reputation, have an operational experience in financing SME, have a stable financial position confirmed by auditors' reports.

This being the case , the IIB checks the conformance of the target programme of a financial intermediary to the IIB’s principles and priorities and constantly monitors the proper use of the funds.

Banks

When the two-level loan scheme is used, the financing is provided to SME by the following banks operating in the member state:

— national development banks;

— banks with the state participation and/or with the participation of national and international development banks;

— commercial banks.

Leasing companies

Leasing is an efficient instrument of modernization of fixed assets and expansion of production by SME with minimum expenditure of their own funds.

Financing is provided to leasing companies meeting the Bank’s criteria for target programmes of provision of leasing products to SME wishing to take on lease any production equipment, motor vehicles, construction or agricultural equipment, as well as other equipment.