1. REPUBLIC OF BELARUS INTERNATIONAL ENTREPRENEUERSHIP FORUM Increasing Competitiveness of the Belarusian Economy - Access to Finance of Households and Firms Johanna Jaeger, Senior Financial Sector Specialist, Minsk, 16 November 2015

2. Development Module FSAP 2014 - Key Findings 2  Macroeconomic outlook remains fragile with risks of reignited inflation and exchange rate pressures  Banking sector  High and volatile lending rates limit external funding sources of the private sector  High concentration and dominance of state owned banks  Distortion in capital allocation through directed lending programs to priority sectors (housing, agriculture)  Unrealized development potential of non-banking financial institutions  Development and deepening of capital markets as an important provider of long term financing  Expansion of role of insurance sector as institutional investor  Facilitation of an enabling environment for MFIs  Growth potential of alternative financing tools (leasing/factoring)

3. Evolution of Bank Lending 3

4. Financial Inclusion *Note: The change in account ownership from 2011 to 2014 is shown in red above each bar. Financial Inclusion Total Percentage of Adults 10 pp

5. Access to Finance Constraints for Enterprises Source: Enterprise Survey, WB staff calculations

6. Financing Gap of Enterprises Source: Enterprise Survey, WB staff calculations

7. 7 Financing needs are broad and vary by stage of development… 7

8. Enterprise & Household Finance – Policy Responses 8 ConstraintsResponses Information asymmetry Credit Reporting Systems, Reliable Financial Information Usable collateral Secured Transactions Frameworks (including movable assets registries) Weaknesses in NPL resolution Insolvency and Creditor Rights’ Framework Lack of Financing Sources and Products Credit lines, Guarantee Schemes, State Banks, SME Exchanges, Reforms to encourage leasing, factoring Financial Capability Financial Education, Training, Awareness Campaigns

9. The World Bank offers a comprehensive set of instruments to support policy and legal reforms, financial infrastructure development, guarantee mechanisms, regulatory standards, financing platforms, etc. Instruments include financing, policy advice, data, and technical assistance. The World Bank Group and Enterprise Finance Select WBG activities in the WBS Ukraine Export Development Project Centre for Financial Reporting Reform – CFRR in Vienna, Austria, is responsible for the World Bank’s corporate financial reporting activities across the Europe and Central Asia region. BiH Line of credit to enhance access to finance for SMEs Croatia Export Financing Guarantee Project Belarus Competitiveness Enhancement Project with access to finance component (under preparation)

10. Thank you! Johanna Jaeger jjaeger@worldbank.org