Sustainability approach is organically integrated in Russian Agricultural Bank’s core business and operations. The Bank’s sustainable business practices link back to its mission, vision, and values and are targeted at ensuring national agribusiness development, the country’s food security, achieving the status of Russia as the world’s leading food producer and exporter, increasing financial literacy and upgrading the overall welfare of the rural population. This is achieved through supporting SMEs, developing rural territories and mid-sized cities, promoting innovations and resource-efficient technologies in agribusiness, facilitating investments and improving investment climate, diversifying the product range, increasing access and affordability of high quality financial services.
Financial support of SMEs
The Russian Government attaches special importance to the support of small- and medium-sized enterprises (SMEs). SMEs heat up competition and prevent monopolization in a large number of spheres.
As part of the National project “Small and Mid-sized Entrepreneurship and the Support for Business Initiatives"1 the Government has approved a federal project "Small and medium-sized business and support for individual entrepreneurial initiatives" with total allocations of RUB 37.4 billion.
Russian Agricultural Bank views activity of SMEs as an area of unlocking prospects and growth drivers for the national economy. Therefore, the Bank puts special focus on financial support of SMEs. Currently, Russian Agricultural Bank offers more than 30 lending programs tailored for this business segment and is ranked 3rd by lending to SMEs across all segments. Since the start of operations (data on SMEs is tracked since 2008) the Bank has provided more than RUB 3 trillion for SMEs development, with more than RUB 2 billion provided to agribusiness SMEs.
Enhancing access to financing
In almost every region Russian Agricultural Bank provides financial support to entrepreneurs employed in trade, tourism, household services, and other services not directly related to agribusiness. Thanks to this, the commercial sector, in fact, is also engaged in developing rural territories.
In line with the national development priorities, the Bank places special focus on financing: promising investment projects in the Far East that facilitate better social and economic conditions in the regions and enhanced environmental protection.
Engagement with local communities and authorities
Russian Agricultural Bank leverages its countrywide footprint and strengthens liaisons with regional authorities, SME financing funds and guarantee agencies in the territories in which it is present to prepare and implement regional development strategies and federal policies in economic, social, educational and other spheres.
Involvement in Government programs
Playing a pivotal role in agribusiness financial support, Russian Agricultural Bank, for more than 14 years now, has participated in the government sustainability programs focused on social aspects.
The State Program encompasses a number of key focus areas: providing consumers with safe agricultural products and foodstuffs; enhancing competitiveness of the domestic produce in internal and external markets; ensuring sustainable development of rural areas, employment of rural residents, upgrading living standards and qualification; preservation and reproduction of natural resources used in agriculture.
Lending for various purposes, such as: machinery, livestock, grain, fuel, and fertilizers purchases, land, warehouses and facilities lease with priority given to agribusiness producers, farmers, agricultural consumer cooperatives, food processing companies, fisheries and aquaculture producers, markets and shopping facilities;
Financing seasonal field works. The Bank accounts for 71.6% of total seasonal field works financing, with RUB 326 billion in loans issued for this purpose in 2018;
Lending to agricultural credit and consumer cooperatives. This type of support contributes to closer cooperation and integration in rural areas. Credit and consumer cooperatives are an important vehicle for rural financial stability;
Financing investment projects for constructing and upgrading greenhouses, livestock and fish breeding facilities. Since 2013 the Bank has financed 982 agribusiness investment projects with total financing amounting to RUB 467 billion. Lending disbursed by the Bank under such projects amounted to RUB 337 billion.
Developing all forms of small business, including family-operated farms and startups. Fostering agribusiness startups creates new jobs for young professionals and qualified personnel retention in rural areas;
Agribusiness subsidized lending programme (Government decree No. 1528) As part of this procedure in 2018 the Bank provided RUB 223 billion to agribusiness producers. Under the agribusiness soft lending programme Russian Agricultural Bank lends at maximum 5% p.a. Subsidies are paid directly to banks, which gives farmers easier access to state support. To launch the programme, Russian Agricultural Bank was the first to sign an agreement with the Russian Ministry of Agriculture under Russian Government’s Decree No 1528 dated 18 January 2017;
Support of export-oriented businesses. Providing customers with the opportunity to work within the framework of the Eurasia Economic Union via its sales and service channels. The Bank’s efforts in this area contributed to national foodstuffs and raw materials exports reaching USD 25.8 billion in 2018 (+25% year-on-year), including 288 thousand tonnes of meat (+21% y-o-y). For the season 2018/2019 (from July 2018 to June 2019) exports of grain reached 33.5 million. Russian Agricultural Bank has signed a framework agreement with Russian Export Center JSC aimed at expanding financial support to Russian non-commodity exporters. The agreement will enable the Bank to provide financing at subsidized interest rates. The Bank’s expenses will be partially reimbursed from the federal budget.
The Bank is actively involved in implementing special purpose federal subprograms:
Sustainable development of rural areas. This program is aimed at upgrading living standards, stimulating investments in agribusiness, strengthening positive attitudes towards rural life and developing non-agricultural production and employment; promoting the creation of hi-tech employment opportunities.
State program for construction development. The program is aimed at support of residential construction for certain categories of citizens, support of solvent demand for housing, enhancing quality of utility services. As part of this program, the Bank is involved in the sub-program ‘State subsidized mortgage lending’. Moreover, the Bank is a participant of other sub-programs by financing development projects aimed at providing affordable and comfortable housing to Russian citizens and industrial projects designed to provide high-quality utility services.
Lending stimulation for small and mid-sized businesses (6.5 Program) in cooperation with the SME Development Corporation. In 2018, the Bank approved 328 loan applications for a total amount of RUB 5.5 billion.
Increasing product diversification and affordability
Operating through its widespread branch network present both in large and smaller urban and rural communities, the Bank takes efforts towards enhancing the quality of services and designing a highly demanded and well-balanced product offering, satisfying the needs of various customer segments.
Russian Agricultural Bank developed special product offerings incorporating attractive terms for pensioners, household plot owners, military servicemen and public sector employees.
Reducing environmental impact
Russian Agricultural Bank has adopted and implements voluntary environmental responsibility principles to preserve and restore natural resources, and to reduce the environmental footprint from the Bank’s activities, as well as to raise social responsibility awareness.
Russian Agricultural Bank as the key lender to Russian agribusiness supports projects targeted at resource conservation, energy efficiency and support of nature conservation activities. Projects in plant breeding are aimed at increasing the efficient use of land, water and other natural resources. Projects in livestock breeding (structured as investments and project finance) comply with the latest environmental safety standards, comprise waste recycling and utilization stages while minimizing the negative impact on environment.
The Bank’s operations are aligned with the goals and tasks of the national Project “Ecology” launched in late 2018 under the Direction of the Russian Ministry of Natural Resources and Ecology.
Sponsorship and Charity
As a corporate citizen committed to meeting societal needs and expectations, Russian Agricultural Bank extends tangible help to local communities via charitable activities, sponsorships and donations. The Bank promotes philanthropic activities with emphasis on key priorities of Russia’s social and economic development and defined by the Bank shareholders. Thus, in 2018, Russian Agricultural Bank engaged in philanthropic activities in five key areas relating to community support, education, spiritual education, sports and physical education; protection of environment and biodiversity.
1National Priority Projects developed according to the Presidential Order No 204 dated 7 May 2018 “On the National Goals and Strategic Tasks of Development of the Russian Federation for the period up to 2024”.