WHO’s WHO IN MICROFINANCE: The Russian Microfinance Center (RMC)

The Russian Microfinance Center (RMC), a not for profit trade organization, was established in 2002 to work on behalf of the Russian microfinance community. Its mission is to promote the development of the entire Russian microfinance market.

According to a 2005 World Bank study, entitled “Microfinance in Russia Broadening Access to Finance for Micro and Small Entrepreneurs”, a need exists for more microlending in Russia. It stated “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.“[1]

As of 2009, approximately 24.5 million out of the 142 million people [2] in Russia live below the poverty line. The poverty line is defined as those who make less than RUB 5,497 (USD 185) per month. [3]

In 2008, the Microfinance Information Exchange (MIX), and the RMC published a paper that analyzed the microfinance industry in Russia. The paper stated that the number of microfinance institutions (MFIs) had increased to approximately 2,000, serving nearly 700,000 customers (borrowers and savers). According to the RMC estimates, the aggregate offer of loans by non-bank MFIs totaled USD 625 million. Microfinance banks, such as KMB and Forus, in addition to programs from commercial banks supported by the European Bank for Reconstruction and Development (EBRD) had an aggregate portfolio estimated of USD 2 billion. [4]

As of 2007, the RMC had served approximately 400 banks and non-bank microfinance providers. It works with international organizations such as CGAP, SEEP, USAID, Citigroup, DAI Int., the World Bank, EBRD, the European Union, Barrick Gold Mining, the European Microfinance Network (EMN) and the Microfinance Center for central and Eastern Europe (MFC). The RMC Supervisory Board currently includes representatives of 22 major Russian microfinance institutions with a combined total loan portfolio of USD 170 million and about 120 thousand active customers. [5]

CGAP’s 2008 report “Eastern Europe and Central Asia Microfinance Analysis and Benchmarking Report” showed that in 2008, Russia received the smallest amount of donated funds in the region. Investors provided ninety-nine percent of the USD 3.5 billion while donors provided only one percent. [6]

The RMC’s mission is to support the microfinance sector in the Russian Federation while facilitating access to financial resources. It assists the microfinance sector’s interaction with government, the public, and investors. Additionally, it acts as a legal advocate for microfinance. The RMC also provides training and professional consulting services to microfinance institutions, while developing national microfinance standards.

The RMC’s 5 main goals are to 1) improve the legal and regulatory environment, taking into account the needs of all established forms of microlending; 2) develop industry support infrastructure to facilitate training and education of effective methodologies, within microfinance institutions; 3) develop national microfinance standards while improving transparency and investment interest in the industry; 4) facilitate information exchange to create a shared information infrastructure for microfinance in Russia; and 5) improve social and economic development through supporting microfinance programs across Russia.

RMC’s President, Mikhail V. Mamuta has worked in financial and lending services for Russian small businesses and microfinance since 1997. From 1997 to 2000, Mr. Mamuta worked for the Investments Committee of the Voronezh Regional Administration where he became director of business development. Since 2001, he has served as an industry expert for several Russian and international microfinance programs. He is the author of over 20 publications on physics, economics as well as microfinance and crisis management. He is also a President of the National Partnership of Microfinance Market Stakeholders (NAMMS) and a member of the Government Commission on SME Development and the Coordination Council at the RF Ministry of Finance on the legislation development for the microfinance and credit cooperation. He is involved in developing an all-inclusive financial system in Russia as well as drafting laws aimed at improving small business access to financial services. After completing university, he obtained a master’s degree in physics and a second degree in Finance, Lending, and Banking and has specialized training in crisis management.

The board of trustees consists of 11 members. Andrey Yemelin, Vice President of the Association of Russian Banks; Viktor Sedov, Executive Director of the US Russia Entrepreneur Center; Aleksander Lopukhin, Vice President of the Association of Regional Banks of Russia; Grzegorz Galusek, Executive Director of the Microfinace Center for Central and Eastern Europe and the New Independent States; Kendrick D.White, Managing Principal of Marchmont Capital Partners; Roman Simonov, Managing Director of Delta Private Equity Partners; Mark Robinson, President of Citibank, Russia; Yevgeniy Gorkov, Vice President of Russia Partners; Alexis Rodzyanko, Managing Director of Credit Suisse Private Banking; Kim Iskyan of Uralsib Financial Corporation, and Viktor Yermakov, General Director of the Russian Agency for Small and Medium Business Support.