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Welcome to our

maiden voyage To our ADVANCE readers,


There’s never been a more opportune time and place for us to launch our maiden publication of ADVANCE Magazine than at the 37th ADFIAP Annual Meetings in Moscow this April 23-25, 2014. In light of the issues haunting the global economy, it becomes all the more necessary, not just to keep a tab on what’s happening around us, but also to stay ahead of the curve. And this is the reason we made ADVANCE. Our aim is to provide our member-institutions and partnerorganizations, as well as industry professionals, the academe, and other members of our larger communities, with a vehicle to keep abreast of developments in the areas of development finance and help understand the roles of development financing institutions in a better way. Through this magazine, we also hope to create a more vibrant community of like-minded people and organizations. Our maiden issue carries the theme of our annual conference and offers insightful articles, tips, trivia, and much more. We wish you a great time reading this issue. Happy Reading!

BOBBY PERALTA Secretary General ADFIAP 2


our cover The cover of our maiden issue is a popular symbol in Russia where we are holding for the first time our ADFIAP Annual Meetings. With our conference theme, “Development Banking: Best Practices and Future Trends,” this launch issue will involve some trendwatching, as seen from the eyes of the seasoned development bankers who are gracing the pages of our magazine.





Inside the Mind of A Russian Banker Upclose and personal with Vladimir Dmitriev, Chairman and CEO of Vnesheconombank (VEB), Russia’s largest development bank that is playing host to the 37th ADFIAP Annual Meetings

What’s in store at the 37th ADFIAP Annual Meetings, the biggest annual gathering of development financing institutions



22 Is the tide turning? For many economies, SMEs have limited or no access to financial services. Is the situation changing? We got the views of some CEOs.


AND THE ADFIAP AWARD GOES TO... It’s that time of the year again when development finance institutions shine and get the much-coveted “Development Trihedron” at the annual ADFIAP Awards 2014.




Who says development bankers are not entitled to a superhero? Meet Devee. He makes his debut here in ADVANCE and in a new video that ADFIAP is unveiling for the first time at the 37th Annual Meetings in Moscow.

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april 23-25 ADFIAP 37th Annual Meetings Moscow, Russia

MAY 26-30 Study Tour Program on Vietnamese Microfinance Enterprise & Community Development Hanoi, Vietnam

june 23-27 Loan Officership Program Manila, Philippines

MARK IT! July 21-25 Aug 25-29 SME Banker Program (SME) Manila, Philippines

Green Banker Program (GREEN) Manila, Philippines

Oct 20-22 Corporate Governance Program (CGP) Kuala Lumpur, Malaysia

CEO Forum X Kuala Lumpur, Malaysia


Human Resource Development Program (HRDP) Manila, Philippines

DEC 8-12

Nov 17-21 Public Relations & Communications Program (PRCP) Manila, Philippines

NOV 4-6

Sept 22-26

DEC 1-5 Program on Development Banking� (PDB) Manila, Philippines

Leadership Program ourExecutive cover (EXCEL)

Manila, Philippines

TO FIND OUT MORE For more information about the ADFIAP Asia-Pacific Institute of Development Finance programs and other events, go to: www.adfiap.org

ADFIAP launches 2013 sustainability report with G4 guidelines The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) has launched its 2013 Sustainability Report using the Global Reporting Initiative’s (GRI) G4 Sustainability Reporting Guidelines “in accordance Core.” G4 is an enhancement of the G3.1 sustainability reporting guidelines, focusing mainly on the materiality aspect of sustainability reporting. GRI is a leading organization in the sustainability field that promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to sustainable development.

ADFIAP started using the new G4 guidelines after becoming one of the 84 organizations from 38 countries worldwide that belong to the GRI G4 Pioneers Program. It is an Organizational Stakeholder (OS) Member of the GRI and has been registering its sustainability reports with the GRI disclosure database since 2008.

NEWS ROUNDUP EU’s SWITCH-Asia takes on power-intensive industries

ADFIAP study tour program on banking goes to Italy

The European Union’s SWITCH-Asia program has recently launched a power efficiency project called Switch to High-Efficiency Motors (SWITCH-HEMS) which aims to raise energy efficiency in the private sector, specifically in electricity-intensive industries.

Nineteen senior officials of ADFIAP and the member-institutions of the Association of African DFIs (AADFI) attended a five-day study tour program in Milan and Padova, Italy last March 25 to 29.

SWITCH-HEMS will be implemented over a fouryear period starting in 2014. It will be initially implemented in the Philippine sugar industry and will target four pilot sugar mill projects.

ADFIAP’s Institute of Development Finance (IDF) conducted the program, together with AADFI and the Venice-based Chamber of Cooperation for Incentive and Partnerships (CCIP).

SWITCH-Asia’s lead partner for the project is the IIEE, Inc., a professional organization of electrical engineers in the Philippines. Other partners include ADFIAP, the International Copper Association Southeast Asia (ICA-SEA), the Asia Society for Social Improvement and Sustainable Transformation (ASSIST), the European Chamber of Commerce in the Philippines (ECCP), and the Association Action for Sustainable Development (ASD). The project also has three associates namely, the Philippine Sugar Millers Association (PSME), Bank of the Philippine Islands, and the Philippine Department of Energy (DOE).

AADFI Secretary-General Joseph Alfred Amihere, ADFIAP senior executive on programs Sandra C. Honrado, and program participants from Malaysia, Oman, Botswana, Burundi, Ghana, Nigeria and Zambia were warmly welcomed to Italy by the CCIP Secretary-General and Director, Roberto Alzetta and Dr. Helene Sadaune.


The program aims to enhance the participants’ knowledge and understanding of ethical banking and digital banking evolution in Italy. Visits to ethically and socially oriented banks and financial institutions included Banca Prossima, Banca Popolare, Intesa Bank and the Etica Consortium.

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Expect the biggest gathering of development financing institutions and other organizations to lead to another milestone. and for the first time in the 37-year history of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), it will be held in Moscow. Around a hundred delegates — ADFIAP memberinstitutions, partner organizations, and invited guests – convene in Moscow, Russia on April 2325, 2014 for the 37th ADFIAP Annual Meetings. For the first time in ADFIAP’s history, the annual meetings will be held in Russia and will be hosted by its newest Board member, the Bank for Development and Foreign Economic Affairs (Vnesheconombank). THE ROLE OF DFIs This year’s theme, “Development Banking Best Practices and Future Trends,” is deemed timely and relevant. In many economies, development banking dates back to post-World War II. Development financial institutions (DFIs) provided funding to reconstruct the buildings and industries destroyed during the war. Centuries later, the prime role of DFIs still remain relevant, as many societies still have unmet basic needs. It is also age-old knowledge that long-term investments must be financed with long-term credits, and that long-term growth depends on long-term investments.


Thus, DFIs are playing a bigger role in infrastructure projects where the funding needs are huge. In the European Union alone, it is estimated that up to €2 trillion will be required in its member countries until 2020. As global challenges remain, DFIs do not fade out: they are increasingly being relied upon to spur the growth and development of their nation’s social and economic sectors. EVENT HIGHLIGHTS Highlighting the event will be the Annual Conference proper, the 79th Board of Directors Meeting, the 15th Extraordinary Meeting of the General, the Gala and Awards Night, the DelegateMeets-Delegates Session, and the Fellowship program. The Conference Proper will be divided into four plenary sessions: Plenary Plenary Plenary Plenary

Session Session Session Session

1: 2: 3: 4:

Financial inclusion Infrastructure finance Green finance CEO panel discussion

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MESSAGE from the HOST BANK Dear colleagues, dear friends, dear partners! I would like to express my warmest thanks to Datuk Wan Azhar Wan Ahmad, chairman of ADFIAP’s Board of Directors; to Mr. Octavio B. Peralta, ADFIAP secretary general; and all the ADFIAP team for the opportunity offered to Vnesheconombank to host the 37th ADFIAP Annual Meetings 2014 in Russia. Having obtained the status of the national development bank in 2007, Vnesheconombank has been continuously and actively promoting cooperation with leading international financial organizations and development institutions. This event is even of greater importance for us since we will be hosting it in the year of the 90th anniversary of Vnesheconombank’s foundation. It was with Vnesheconombank’s engagement that the issue of long-term investment was put on the agenda during the Russian Presidency in G20 in 2013. In July 2013, Vnesheconombank successfully held the international conference “Sustainable growth through long-term investment” that gathered around 50 different national and multilateral development banks and the meeting of the heads of G20 financial institutions that have a development or public mandate. Both events served as evidence that, against the backdrop of the economic downturn, budget deficits and looming sovereign debts, development banks tend to play an important role in ensuring the real economy’s access to primarily longterm financial resources both at national and transnational level. In my opinion, the time has come for development institutions to reach a new milestone.


Admittedly, it is the financial institutions that are the most important sources of long-term investment. In view of this, development institutions, equipped with revised strategies, are gradually becoming global players. In many respects, their initiatives and active investment policies impact the local financial environment. Moreover, development institutions exert an increasingly significant impact on the global financial architecture. Active support by national development institutions is crucially important for those programs and projects, which require long term financing, in sectors such as national and trans-border infrastructure, green, innovative and inclusive growth projects, and projects on mitigation of climate change and its aftereffects, as well as systemic support to SMEs and entrepreneurship. This year, in close coordination with ADFIAP Secretariat, we decided to pay more focused attention to the issue of SME development in our countries. For the last 20 years, Russia has passed a long way of SME development. On the one hand, we would like to share our experience with the ones who are going through the same process; but on the other, to examine our partner’s savoir-faire in boosting SME entrepreneurship. I look forward to welcoming you in Moscow on 23-25th of April 2014 and I hope that both — our sessions program and leisure activities — would satisfy your professional appetite and leave the most positive impressions. VLADIMIR DMITRIEV Chairman State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank)



2009 Financing Development amidst the global crisis: “DFI Responses, Challenges and Opportunities

2011 Responding to Global

Issues & Trends: The Strategic Role, Resources and Relationships of National Development Finance Institutions

2008 Innovative Development Finance: DFI’s Response to the needs of the Times


Sustainable Development Finance: Issues & Future Directions

2013 DFIs & Chambers of

Commerce & Industry: Advancing Sustainable Businesses

2003 Critical Issues in Development Banking in the New Environment

2001 DFIs’ Relationship with the Government and Market/Risk Management

2000 1988

Strengthening the Management of DFI Portfolios

Development Banking in the New Millennium

1991 DFIs Responses

to the New Challenges of Development Financing in the Asia-Pacific Region

1989 Agenda for

1994 Maximizing


Development Financing in the 1990s

DFI Resources and Capabilities for the 21st Century: Issues Problems, and Directions

Innovative Financing for a Greener Economy



Strengthening DFIs’ Management Structure Amidst the Impact of Changes in the Economic and Social Environment


1998 The Lessons

1993 DFIs: Breaking New

Financing for a Greener Economy

2006 Are they Sustainable?/

1996 New Business Opportunities and Challenges for Development Banks

of the Asian Financial Crisis and the Role of Development Banks

2012 DFIs’ Role

in Sustainable Development amidst the Economic Crisis

1979 Challenges

Confronting DFIs in Asia and the Pacific in the 1980s


Diversification of DFIs Operations and Services

2002 Revisiting the Development Banking Philosophy in Asia and the Pacific: A Call for the Times

DFIs: Measuring up to International Standards and Practices

Strengthening DFI and Client Services to Meet New Challenges

1978 Innovative Ground in the Financing of Development in the Asia Pacific Region

Opportunities for Sustainable Investments

1982 The Role of funding Strategies of DFIs in a Changing Economic and Financial Environment

1997 New Challenges,

New Opportunities in Financing Development and Trade in the Asia Pacific Region in the New World Trade

1987 Accessing Capital Markets by DFIs—Risk and Benefits



DFIs: Investing into the Future

1983 Critical

Issues on Project Management and Supervision Under Recessionary Conditions

1986 DFI Responses to the Emerging Imperatives in the Financing of Development in AsiaPacific

1992 Excellence 1990

DFIs and National Development


The DFI and its Business: Trends and Issues Concerning Bank Operation

in Development Banking: Challenges, 1981 The Roles of DFIs in Strategies and Technology Transfer & ADFIAP Experiences Strategy for Management and Professional Development

1995 Enhancing DFI

Competitiveness & Service Excellence Through Innovative Banking Technology

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SPOTLIGHT An interview with Vladimir Dmitriev, Chairman of the State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank)





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He has been recognized for his outstanding contributions to the development of the financial and banking system of russia. It is thus no surprise to read the many zeroes and the dizzying ‘billions’ that he would mention whenever he talks about the russian development bank that he chairs. in this adv>nce interview, MR. VLADIMIR DMITRIEV, chairman of state corporation “bank for development and foreign economic affairs” (Vnesheconombank), dazzles us some more.

Q&A What convinced you to play host to the 37th ADFIAP Annual Meetings? We strongly believe in the importance and viability of the activities carried out by ADFIAP, as well as we deem ADFIAP’s experience to be very important for VEB in securing sustainable development. We highly appreciate the role of ADFIAP in supporting development of the Asia-Pacific region. The Asia-Pacific Region is among Russia’s foreign economic priorities while The Far East and the Baikal regions come within VEB’s investment policy priorities. Vnesheconombank entered into agreements on long-term cooperation with the Khabarovsk and Primorsky Territories, with the Amur Sakhalin and Irkutsk regions and with the Republic of Sakha (Yakutia). And VEB’s subsidiaries – engineering, leasing and investment companies and the Export Insurance Agency of Russia are integrated in regional programs.


As of December 1, 2013, the total value of projects (completed, being underway or scheduled to be carried out) exceeded RUB 616 billion. The Bank’s commitment amounted to RUB 448 billion. As a result, the region will witness the creation of about 21,000 modern jobs. Another seven projects for the total amount of RUB 316.8 billion with the Bank’s potential commitment of RUB 295 billion are currently subject to expert examination. The largest projects include constructing a railway bridge across the Amur River to China, developing the Vladivostok international airport, and creating a fishing industrial center on the Shikotan Island. Therefore, we would like to express our willingness to participate in the process that contributes to maintaining sustainability, not only in the AsiaPacific region, but also in the entire world. For VEB, hosting ADFIAP Meetings in Moscow is a great honor and an opportunity to achieve closer interaction between all the ADFIAP members.

What can members expect from you as host of the conference? In hosting the ADFIAP conference, the Bank, capitalizing on its expertise, would be able to facilitate efficient communication between the members and secure establishing contacts with various Russian entities, which could be of interest for the ADFIAP members. We are also prepared to provide ADFIAP members with the desired advice and assistance. What is the annual meetings theme? Why did you choose this theme? The theme of the meeting is “Development Banking Best Practices & Future Trends.” Vnesheconombank strongly supports the idea that development banks worldwide tend to be actively engaged in addressing global economic and financial challenges. The past year, Vnesheconombank successfully held the international conference “Sustainable Growth through Long-term Investment” that gathered around 50 different national and multilateral development banks and the Meeting of the heads of G20 financial institutions that have a development or public mandate. SPECIAL MAIDEN ISSUE • APRIL 2014

All the participants unanimously emphasized the idea of the development banks’ increasing role in the modern financial system and the investment architecture. Thus, we truly believe that ADFIAP Annual Meetings will diversify the discussions agenda and generate new valuable approaches and ideas. Can you provide some information on your Bank? What is your industry ranking in your country? Vnesheconombank is a state corporation performing the functions of the Bank for Development. Vnesheconombank funds major investment projects aimed at removing infrastructure constraints to economy growth. VEB does not compete with commercial credit institutions and participates only in projects that do not make commercial sense for private investors. Our key function is to fund investment projects that have a high multiplier effect for the national economy but are too unwieldy and long-term for private companies and the state in terms of resources, risks and the time scale of return on investment.

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What important/major projects in Russia have you handled in the past five years? How did these projects help the Russian economy? First of all, it is important to mention that currently the overall number of projects financed by the Bank exceeds 150. The loan portfolio has actually exceeded RUB 1500 billion (approximately USD 45 billion). Pipeline currently under review amounts to RUB 1,000 billion (approximately USD 30 billion) and projects already approved worth about RUB 2000 billion (approximately USD 60 billion).

modernization of the Khabarovsk refinery and construction of a polypropylene manufacturing complex in Tobolsk, received the “Deal of the year Award” of the Trade Finance Magazine incorporated in the Euromoney plc Publishing Group. These projects were implemented on the principles of export-import and project finance through raising financing (up to 10 and 13 years, respectively) from a syndicate of foreign banks against the coverage of foreign export insurance agencies.

According to VEB’s current Development Strategy, by end-2015, the amount of the Bank’s support for the national economy will equal RUB 1900 billion, including subordinated loans and leasing transactions, accounting for 2.4% of Russia’s GDP. During the implementation of this Strategy, due to VEB’s financing, at least 1.5 additional percentage points are expected to be added to Russia’s real GDP growth.

What we are also very proud of is our considerable participation in one of the largest construction endeavor in the world, the major Russian project, the key reputational construction site of the nation - the Sochi Olympic project. VEB has participated as the project’s leading financial and investment institution (RUB 240 billion).

As for the concrete examples, in 2010, two projects in which Vnesheconombank participated, namely,


We are confident the significance of this project for the Russian economy is overwhelming and needless to explain.

the overall number of projects financed by the Bank exceeds 150. The loan portfolio has actually exceeded RUB 1500 billion (USD 45 billion). by the end of 2015, the amount of the Bank’s support for the national economy will equal RUB 1900 billion.

How do you expect to benefit from hosting this conference? First of all, VEB’s management will be happy to meet in person their colleagues from ADFIAPmember institutions and banks and discuss in person a number of vital issues. We believe that regular personal communication is an important prerequisite for successful and long-lasting cooperation. Secondly, we aim to arouse ADFIAP members’ interest in the Russian government’s and VEB’s support for SMEs and other countries’ practices in this sphere. And lastly, we would be happy to welcome our ADFIAP partners in Russia so that to dismantle most common stereotypes of Russia and Russian people. How does being a member of ADFIAP benefit your Bank? Firstly, we benefit from cooperation with a very wide network of development institutions in the AsiaPacific and seek to economically integrate within the region. We hope that we have enough valuable experience to share with our ADFIAP partners as well as to extract good value from their successful practices. We believe that ADFIAP membership opens up an opportunity to funding mutually beneficial projects in the future. What advice would you give to ADFIAP members and guests traveling to Moscow for the first time? No one could doubt that Moscow is a unique city with its history dating back to the 12th century. The city could boast of a great number of historic sights, architectural masterpieces as well as newly built skyscrapers and modern infrastructure. We are very proud of Russia’s cultural heritage witnessed in famous Moscow theatres, museums and galleries, symphony concert halls and monuments. But everyone should remember that the spring weather is most changeable and besides, Moscow as any other metropolis faces a huge problem of traffic. SPECIAL MAIDEN ISSUE • APRIL 2014

How long have you been a banker? For more than 15 years. How long have you been the Chairman of your Bank? I’ve been VEB’s Chairman since 2004. How old are you? 60 years old. Born August 25, 1953, in Moscow. How would you describe your Bank? State corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ was established in 2007 by transforming Vnesheconombank of the USSR, one of the oldest institutions in the Russian banking system. The Bank’s objective is to give an extra competitive edge to the Russian economy, promote its diversification and stimulate improvement of the national investment climate. Vnesheconombank is 100%-owned by the Russian Federation. To accomplish our ambitious objectives we are actively cooperating with international financial institutions. Having assumed the status and competences of a development bank just seven years ago, VEB has managed to take a well deserved place among the development institutions of other countries. And honestly, I am very proud of the dedicated work of the VEB team. What role does your Bank play in helping sustain the growth of the Russian economy? Vnesheconombank seeks to diversify the Russian economy, boost its competitiveness and encourage investment activities. The Bank for Development engages in foreign economic affairs and is responsible for providing investment, insurance and consultative support for projects in Russia and abroad aiming to develop infrastructure, innovations, special economic zones, secure environment protection, facilitate exports of Russian products, works and services as well as support SMEs.

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It serves as an instrument to implement the state economic policies in respect of: • removing infrastructure constraints to economic growth; • increasing efficiency of the natural resources utilization; • developing hi-tech industries; • unlocking innovation and production potential of SMEs; and • promoting national exports. How would you describe the Russian banking industry and the level of competition? We recognize that the financial authorities’ management of the crisis of 2008-2009 was more effective than that demonstrated during the previous crises. The matter is that Russian banks have a restrained risk appetite evidenced by their moderate profitability, simple products and are relatively small-sized as compared with the large corporations that dominate the economy. We classify the Russian government’s actions as supportive towards banks. Since 2008, the government has taken a much more predictable and effective stance toward financial institutions in predicament, including organized takeovers of several failing banks by the Deposit Insurance Agency (DIA) and state institutions such as Vnesheconombank. The introduction of deposit insurance in 2004 and the DIA’s competent administration of troubled and failed banks helped to build up confidence in the banking system. But regrettably, long-term credits fail to become an important source for funding investment required for stimulating economy growth. It is mainly for increasing the working capital rather than financing investment in fixed assets that enterprises use banking credits. On average, only 2-3% of all the credits extended by Russian banks to corporations are channeled into funding investment. In these circumstances, the role of banks for development tends to increase.


As of 01.07.2013, in terms of long-term loans (exceeding three years), provided by VEB to nonfinancial institutions, the Bank ranks second. The share of such loans in VEB’s loan portfolio reaches 98% (as compared to 55%, on average, posted by major Russian banks). The long-term loan portfolio of VEB grows twice as fast, on average, as that of major banks (40% against 22%). Also, VEB ranks first among major Russian banks in terms of long-term credits increase/the Bank’s equity. Remarkably, VEB is among four major banks crediting the real sector of Russia’s economy. But it is worth noting that three other banks (VTB, Sberbank, Gazprom) are also state-owned entities. What are the biggest challenges you have faced as a Chairman? Today, when political, economic and financial conditions worldwide are unfavorable for development, when we are facing formidable budget constraints and the commercial banks’ reluctance to commit their resources to long-term funding, financial institutions for development are combining their efforts to create new approaches to provision of long-term finance that would satisfy the strict regulations put in place by central banks since the financial crisis started. Since one of the major VEB’s aims is to facilitate sustainable growth in Russia and globally, I do understand that it requires not only a purely economic agenda; the task encompasses a whole range of aspects of social and environmental responsibility. Thus, being a Chairman of Russia’s national development bank, I am committed to undertaking the responsibility and maximizing VEB’s contribution to sustainable growth of the Russian economy. What are your special interests and hobbies when you’re not working in the bank? I must admit that my occupation doesn’t leave me much free time. But when it happens, I mostly spend my spare time with my family. During vacations I prefer to go in for sports and read something different from financial reports or books on economics.

I must admit that my occupation doesn’t leave me much free time. But when it happens, I mostly spend my spare time with my family. During vacations I prefer to go in for sports and read something different from financial reports or books on economics.

How would you describe the bank as a member of ADFIAP? Enjoying our membership status (since January 2013) Vnesheconombank is highly interested in developing long-lasting relationship with your esteemed institution, as well as in joint implementation of projects in such sectors as: aircraft industry, shipbuilding, infrastructure, electronics, engineering, metallurgy, and timber processing industry, environmental protection, energy efficiency, social development, micro-finance and SME projects. ADFIAP membership will enable Vnesheconombank to participate in co-financing with other Association members of various projects and benefit from each party’s experience for common good.


What do you look forward to in hosting the 37th annual meetings of ADFIAP in Moscow? Hosting the 37th ADFIAP Annual General Meetings in April 23-25, 2014 would be a great honor for Vnesheconombank and we are fully prepared to undertake all the responsibility in arranging it in Russia. I will be happy to see all ADFIAP members as well as honorary members of the Association in Moscow and I believe we can generate fruitful discussions on a number of key issues. And I hope that all our guests will enjoy the hospitality of Russian people and my native city. >>>

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city Arkhangel- Komsomolskaya Komsomolskaya Sretensky space STATION bar STATION skoye palace UNDERGROUND


hile it’s a place that dates back to the 12th century, Moscow still stirs curiousity and draws adventurous travelers. Exploring its many cultural wonders — from the jaw-dropping exhibits at the Tretyakov Gallery to some of the world’s most charming subway stations intricately designed with stained glass, marble and intricate mosaics — makes one of the world’s largest cities a daunting challenge for sightseeing. Here are some travel tips from various online sites to help you soak in the sights and sounds of Moscow in one quick go.


Café Khachapuri



go express There’s really no reason to haggle with taxi drivers, since the Aeroexpress train takes even less time between the airport and Moscow city center, and you can connect to the Metro at Paveletskaya to get to wherever you need to go (just pack light).

visit the kremlin No trip to Moscow would be complete without stepping into the Kremlin. This remains the seat of political power of Russia and once the center of the Orthodox Church.

DINE LIKE A RUSSIAN Georgian food and wine were beloved during the Soviet Union and continues to be popular in Moscow. Try hip local chain Café Khachapuri which specializes in different varieties of the namesake “khachapuri,” a traditional Georgian bread stuffed with melted Georgian sulguni cheese.

take a SELFIE Of course, the best location for a “selfie” is right outside the Kremlin’s northeastern wall: the picturesque Red Square. This area of cobbles is at the very heart of Moscow. Commanding the square from the southern end is St Basil’s Cathedral. Take in a panoramic shot and send your heart aflutter, especially at night.


Go under

The City Space Bar, on the top floor of the Swissotel Krasnye Holmy, is your best bet for incredible 360-degree views of Moscow while sipping elegant and innovative (albeit very pricey) cocktails and excellent service. In the summer, another great place is the terrace of the Sky Lounge, located atop the Russian Academy of Sciences. Another option is the O2 Lounge atop the Ritz-Carlton Moscow, with its lovely view of Red Square and the Kremlin.

Chances are, unless you’ve experienced other Russian or former Soviet subway systems, you’ve never seen more beautiful stations. Don’t miss Novoslobodskaya, Komsomolskaya, Mayakovskaya and Ploschad Revolutsii, to name a few, whether you visit on your own or as part of a Moscow Metro Tour. Just as impressive is the subway’s efficiency — you’ll often wait less than a minute for the next train to come.

go to church

take a picnic

You’ll probably visit Red Square and the Kremlin, but don’t forget to buy a cathedral pass so that you can visit Uspensky Sobor, the masterpiece of Italian architect Aristotele Fioravanti and the coronation site of Russian monarchs from 1547 to 1896. Take in the beautiful frescos and icons, but note that photography isn’t allowed inside.

Arkhangelskoye Estate takes a bit of getting to (take Metro Line 7 to Tushinskaya, then a 2030 minute Number 151 mini-bus ride) but is well worth the trek on a beautiful summer or crisp autumn day. Take a picnic with you and enjoy walking around this Russian version of Versailles.


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Since it started in 1997, the adfiap awards has already honored more than a hundred individuals and institutions who have contributed significantly to the development of their respective countries. The awards has become one of the major highlights in the association’s annual membership meetings. This year’s Awardees continue on with the ADFIAP tradition of honor and excellence.

adfiap awards 2014 OUTSTANDING DEVELOPMENT PROJECTS Category 1: Human Capital Development

Category 3 – SME Development

TEKUN Nasional, Malaysia Tekun – The Young Graduate Entrepreneurship Development Program

Development Bank of Japan, Inc. DBJ Enterprise Disaster Resilience Rated Loan Program

Perbadanan Nasional Berhad Talent Management Program

Bank of Industry and Mine BIM’s SME Development Projects (6 projects): • Vahdat Sabz Kordestan • Sisakhat Chevil Cheshmeh • Mobtakeran Jahanasan • Behboode Madane Pars • Sherkate Loleh Profiles Naghade • Sherkate Shar Sanat Shargh

Category 2: Human Capital Development IDBI Bank Ltd. IDBI’s Initiative for Low-Carbon Business Sustainability through Environment Banking Ozone-Depleting Substance (ODS) Phase-Out Project and India Energy Efficiency Project (ICEEP) National Pension and Provident Fund From the Strengths of Hydro-Power to Sustainable Green Development: Dagachhu Hydro-Power Project in Bhutan


Category 4 – Infrastructure Development Fiji Development Bank Fiji Broadcasting Corporation (FBC) Sugar Corporation Co-Generation Project SUNERGISE Fiji Limited Landbank of the Philippines Landbank’s Financing Facility for the Department of Education (DepEd) Public-Private Partnership for School Infrastructure Project (PSIP) Phase 1 Landbank’s Financing Facility for the PPP-Construction of the Tarlac-Pangasinan-La Union Expressway (TPLEX) Development and Expansion of Iligan City Water System

Category 5 – Technology Development Export-Import Bank of India Financing Rural Technology Business Incubatees

Category 7 – Local Economic Development Alalay sa Kaunlaran Inc. Increasing Indigenous Peoples’ Income through Social Entrepreneurship and Rural Development Merit Award: Entrepreneurship Development Institute of India Chanderi (Handloom) Cluster Development Model: A Holistic Development Approach in the Informal Sector

Category 8 – Financial Inclusion National Housing Bank Rural Housing Finance Development Bank of the Philippines DBP Higher Education Loan Program for Students (DBP-HELPS)

and the Trihedron goes to... For many winners of the ADFIAP Awards, the Development Trihedron has become a symbol of pride for receiving the muchcoveted recognition from a regional organization such as ADFIAP. A main feature of the trophy is the topmost section where there are three interlocking pieces of glass that interlock to form a triangle. For ADFIAP, this triangle connotes the three pillars of development: • The private sector, which puts up and manages the productive enterprise; • The development finance institutions, which provide the capital for enterprises to grow and prosper; and • The government, which provides the enabling environment for development to flourish. To know more about the ADFIAP Awards, go to: www.adfiap.org/ development-awards


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adfiap awards 2014 Category 10 – Corporate Social Responsibility Landbank of the Philippines Adopt-A-Watershed Program II/50k@50th Gawad KabuhayanProgram Gawad Patnubay Scholarship Program Merit Award: SME Bank Malaysia Young Entrepreneur Innovation (Y-Biz Challenge)

special awards Best Annual Report IDBI Bank Ltd. Housing Development Finance Corporation Bank of Sri Lanka

Best Sustainability Report Development Bank of the Philippines

individual awards Outstanding CEO Award Datuk Haji Abdul Rahim Hassan Managing Director and CEO TEKUN Nasional, Malaysia

Best Website Small and Medium Enterprise Development Bank of Thailand www.smebank.co.th

Distinguished Person of the Year Award Nasir Issa Al Ismaily General Manager Export Credit Guarantee Agency of Oman (SAOC)

First Payor Land Bank of the Philippines

Special Recognition for DFIs Disaster Recovery Program

Note: No winners for Category 6 (Trade Development) and Best in Membership Recruitment No entry received for Category 9 (Corporate Governance)


Samoa Housing Corporation


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It’s no longer a secret that micro, small and medium enterprises (MSMEs) are unable to access funds from formal lenders and this continues to stifle their growth. Among the main reasons for this inability are the msmes’ poor credit history, insufficient collateral, limited cash flow, unstable business environment, and poor business plan.

Is the tide starting to change?

We ask some CEOs of development finance institutions to share their thoughts.

TRENDWATCHING THE CEOs Mr. Navin Kumar Maini is Deputy Managing Director in-charge in Small Industries Development Bank of India (SIDBI). He has more than three and a half decades of experience in the commercial and development banking field. Mr. Pema Tshering is Managing Director of Bhutan Development Bank Limited. He is a Member of the Board of the Royal Security Exchange of Bhutan (RESB) and Chairman of the BDB Securities Limited. Mrs. Matautia Rula Levi is CEO of the Samoa Housing Corporation. She is now on her fourth term in office since her initial appointment in 2005.

For some economies, micro, small and medium enterprises (MSMEs) have either limited or no access to financial services. Do you think this situation is changing? Mr. Maini: The availability of adequate, timely and affordable credit is a major concern of the MSME sector the world over. Enterprise Surveys conducted by the World Bank in over 120 countries show that SMEs face more severe financing constraints than large firms, especially in lower income environments. Only 17% and 32% of small firms in low and middle-income countries, respectively, have a loan or line of credit. But we believe that as the MSMEs become technologically advanced and more competitive, banks would be more willing to provide credit to them. In the case of India, credit to MSMEs continues to increase over the years. Credit flow to the sector has increased by 23.6% as of the end of December 2013 versus the previous year. I am sure similar positive scenarios would be emerging in other countries. Mr. Tshering: Yes, this was the situation of SMEs some years back. Now with the relaxation of the


lending norms of the banks in favor of the SMEs, especially pertaining to the collateral requirements, more and more SMEs are getting access to formal financial services. Further, as part of risk management and with investment opportunities in medium and large enterprises reaching saturation point, and with many educated youths entering the job markets, the banks diversify their investment portfolios by giving loans to the SME sector. Mrs. Levi: Definitely. There is much greater access to financial services now than ever before in Samoa for small businesses through the assistance from development financing institutions, guarantee schemes, microfinancing, and other development agencies. What factors would make it easy for MSMEs to access bank credit? Mr. Maini: An enabling eco-system needs be put in place for faster credit growth to the MSME sector. MSMEs have varied credit requirements. The financial system should be in a position to meet those varied requirements including receivable financing, venture capital/equity support, and so on. Besides, facilities SPECIAL MAIDEN ISSUE • APRIL 2014

like concessional export financing, credit advisory services, differential cash reserve requirements, etc. can ease SMEs’ access to bank credit. Moreover, supporting financial infrastructure comprising, amongst others, a credit guarantee institution, credit rating institution, credit information bureau, a developed equity and debt market, etc. would greatly facilitate credit flow to MSMEs. In addition, there should be favorable policy measures in place. For example, in the case of India, credit to MSMEs is treated as priority sector lending by banks. Also, the Reserve Bank of India (RBI), which is the central bank of the country, has issued instructions to banks to achieve 20% annual MSME credit growth, 60% of credit to MSMEs to be earmarked for micro enterprises and 10% growth in loan accounts of micro enterprises. Mrs. Levi: Business and financial training and advisory services, including guarantee schemes for loans to enable SMEs access credit and boost their confidence in the marketplace, would be highly desirable. Training and advisory services must continue for the next two years of startups as it is proven that the first two years are the most challenging for SMEs in order to survive.

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FORUM Mr. Tshering: There are several factors that would make it easy for SMEs to access credit: • Develop a national policy framework for SME development; • Identify business opportunities that can be taken up by SMEs; • Establish Business Information Centres for SMEs; • Have capacity building programs for SMEs such as regular and refresher training, seminars and exchange visits; • Adopt viability-based lending over purely collateral-based lending; • Provide government guarantee for those SMEs with social mandates or engaged in government priority areas; • Start capital development fund/seed capital for SMEs; • Encourage small SMES doing same business activities to form registered groups or cooperatives so that the banks can go for wholesale lending and thereby reduce lending costs most importantly they can enjoy economies of scale in production and sale of their products (for SMEs engaged in production only); and • Have a proper monitoring mechanism. What is your bank doing to make credit accessible to SMEs? Mr. Maini: SIDBI is facilitating and strengthening the credit flow to MSMEs by addressing both the financial and developmental gaps in the MSME ecosystem. In the credit support area, SIDBI provides refinance to banks and FIs for onward lending to MSMEs through their more than 92,000 branches across the country. In addition, SIDBI provides direct credit to MSMEs with greater thrust on niche areas like risk capital/ equity assistance, sustainable finance for energy efficiency and cleaner production, receivable financing, services sector financing, etc. This way, SIDBI is complementing and supplementing the efforts of commercial banks in meeting diverse credit needs of the MSMEs, while simultaneously playing its developmental role. SIDBI has a special scheme such as the Growth Capital and Equity Assistance Scheme for MSMEs (GEMS) under which SIDBI offers financial assistance to bridge the gap between the two chief sources of finance: bank loans (senior debt) and promoter’s capital.


Secondly, SIDBI has a special scheme called Receivable Finance Scheme to help the MSMEs in quicker realization of their receivables, thereby addressing the problem of delayed payments. Thirdly, sustainable development through energy saving by MSME sector is another thrust area of SIDBI. For this, SIDBI provides specialized assistance for Energy Efficiency and clean/green environment investments in the MSME sector. Fourthly, the Bank’s strategy in regard to financing of the services sector which constitutes almost 60% of GDP, includes identification of thrust areas for lending under this sector, charting out a focused business development strategy, encouraging product innovation suited to the needs of the industry, improving credit delivery and having in place a pricing policy which supports business growth linked to risk. Cumulatively, till September 2013, SIDBI has provided financial assistance of USD49 billion benefitting about 33 million persons/entities in the MSME sector. Regarding non-credit measures to encourage greater credit availability to MSMEs, SIDBI has set up 306 Credit Advisory Centres in as many clusters to provide a number of free escort services to MSMEs at the cluster level which include guiding new/existing entrepreneurs regarding availability of schemes of commercial banks, government subsidies / benefits, provide borrowers with debt counselling, addressing queries raised by the banks, etc. Secondly, SIDBI has also initiated Loan Syndication Services which are a validated model to make financing easier for MSMEs. In order to encourage youth entrepreneurship, SIDBI has set up a website called www.smallB. com in which provides hand-holding guidance to new entrepreneurs on how to set up new units, as also for the existing ones on how to grow in future. CONTINUE TO PAGE 27 >>>


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The new ‘superhero’ of development bankers LOAN APPROVED! Devee, could you explain why you are recommending this project for a loan?

It’s a good project, Sir. It will help the community around it.



The project will boost the economy, create jobs and is eco-friendly, too! I made an impact assessment.

In what way?

3 You can do the Math, Sir. I already took care of the Social Studies!

Okay. But can the project pay for the loan?






>>> Continued from page 26

I would also like to mention that, SIDBI, along with Govt. of India, had set up a Credit Guarantee Trust Fund for Micro and Small Enterprise (CGTMSE) to provide credit guarantee for loans up to USD 0.16 million given to MSEs by banks. It has been a major game changer in the field of MSME financing. The Trust has reached out to 1.3 million Micro and Small Enterprises by guaranteeing loans of over USD 10.6 billion at end December 2013. SIDBI has also supported setting up of a specialised rating agency for MSMEs called SME Rating Agency of India Ltd. (SMERA) and India SME Asset Reconstruction Company Limited (ISARC). Mr. Tshering: Bhutan Development Bank (BDB) is the only financial institution in Bhutan that lends in rural areas which is already in line with the plan of the ruling government to develop SMEs in rural areas. A number of credit products have been introduced for SMEs such as Entrepreneurship Development program loan, joint liability group loan, SME loan for those SMEs registered with Bhutan Chamber of


Commerce and Industry, vegetable vendor loan and cooperative loan. We also have 33 branch offices spread across all 20 districts. Five field offices were opened in rural areas in 2013 and about seven extension counters will be opened in 2014 to increase the accessibility of credit by SMEs. The bank, together with relevant stakeholders both within and outside Bhutan, provide capacity building programs to the SMEs. Our lending norms have been simplified and viability-based lending has been initiated. Together with the Bhutan Chamber of Commerce and Industry, the bank monitors those SMEs financed by the bank. Sensitization and marketing of bank products and services through print, radio and TV programs and through sponsorship programs are conducted. CONTINUE TO PAGE 28 >>>

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>>> Continued from page 27

Farmers outreaching banking services have been started across the country where the bank’s field staff visits village centers on a monthly basis without the farmers having to come to the branch office. This service, besides saving time and money of the farmers, greatly increases accessibility and faster delivery of credit. The bank’s branch staff are trained on proper appraisal and loan approval authorities have been enhanced. The bank has also started internet and SME banking services across the country. An electronic transfer of loan documents has replaced physical transfer of these said documents, especially for those loans whose amounts are higher than the approval authority of the Branch Managers. Mrs. Levi: Our ceiling for loans with only personal guarantees is high at $20,000 (in tala or local currency, or US$10,000) compared to commercial banks. Hence, we assist those who cannot access credit in these formal institutions and elsewhere. We continue to assist with additional or incremental lending throughout the life project.


With the proliferation of mobile devices, the ability to manage banking needs on the go is on the rise. Do you see MSMEs profiting from mobile banking trends? Mr. Maini: SMEs want mobile-based banking that helps them run their businesses smarter. The ability to manage banking needs on the go makes great business sense for an SME. It provides them immense business convenience as they would rather focus and spend greater time on managing their business operations than spending time at a bank. SMEs, unlike corporates, do not have the luxury of a sizable or specialised workforce taking care of different aspects of business operations. In most cases, the average SME is multi-tasking and playing multiple roles in managing and operating its business. This makes it imperative that the SME has the mobile facility to take care of his banking needs. In addition to business-related financial services, SMEs can also be offered cash management services, insurance products and investment advisory over a convenient mobile channel, thus enabling up-selling and cross-selling to a sector that has had insufficient access to financial services.

Mrs. Levi: Yes, there’s cost-savings in mobile banking trends. However, there might be special needs of SMEs for personal or one-on-one meetings, to better appreciate their concerns. Mr. Tshering: Banking services through mobile devices just started in Bhutan and it is quite early to assess the costs and benefits. The mobile devices at the moment are mostly used to check the account balance and get alert notification. Once the proper check and balance are put in place, they can be used for all banking related instruction processing and to that extent use of paper money and its associated risk can be minimized and at same time transactions will be faster and efficient. What would you advise SMEs trying to access formal banking channels? Mr. Maini: First, the MSMEs should improve their corporate governance, i.e., transparency in dealings and balance sheet. This would infuse a lot of confidence in bankers. As a logical extension, they should go for a third-party rating. The ratings not only validate their financial standing, but also reveal their weaknesses which they might not be aware of and which they will have the opportunity to improve upon. Again, for facilitating smooth and timely availability of bank credit, an MSME borrower should know how to approach banks for credit, banks’ lending criteria, rating parameters, govt. policies and incentives, equity/risk capital support, etc. In addition, they should develop their entrepreneurial skill through specialised trainings. Industry associations can play a major role in bridging such skill gaps. Thus, the MSMEs should address their information gap. It has been our experience that many MSMEs are not aware of various schemes of Govt and banks / FIs which otherwise they could have taken advantage of. In the Indian context, an MSME can access a SIDBI-developed website called www.smallB.in. CONTINUE TO PAGE 31 >>>


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>>> Continued from page 31

Mrs. Levi: A good and well-prepared business plan and understanding of your market will be key to access credit as well as being confident and believing in yourself. Mr. Tshering: My advice: a) Prepare a realistic business plan that is updated regularly;

A good and well-prepared business plan and understanding of your market will be key to access credit.

c) Maintain books of accounts;

e) Do not follow the well beaten track — meaning, do not go into areas where there are many SMEs engaged in the same activities for a small market. Otherwise even the existing profitable ventures will also go into loss;

d) Focus on a few activities instead of starting many activities at the same time and divert attention and resources; and

f) Visit the bank that is relevant to SME in question and follow their instructions and guidelines.

b) Start small instead of jumping into major activities and fail;


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Advance Magazine Maiden Issue April 2014  

Maiden issue of ADVANCE Magazine (The Magazine for Sustainable Development Finance) launched in Moscow, April 23, 2014

Advance Magazine Maiden Issue April 2014  

Maiden issue of ADVANCE Magazine (The Magazine for Sustainable Development Finance) launched in Moscow, April 23, 2014