Trade finance: Russian banks adopt practices of their foreign colleagues

July 10, 2017

Russian farmers now have an opportunity to ask for and receive bank loans securing the loans with their assets.

According to agriculture news portal these assets can be cattle, pigs, chicken, rather than traditional assets like land, immovable property, etc. As of today, the Federal Notarial Chamber reports on over 50% of all loan applications using such types of credit security assets.

At present securing credits on cattle is more popular among large agrobusinesses. In this case the cattle has to comply with bank’s requirements to credit security assets.

We must say that in agricultural business various types of grains, such as wheat, barley and others are quite often used as an asset sucuring the loan and such assets are well accepted by leading international banks like BNP, UBS, Societe General Bank, BCV, ING and used by them trade finance.

During all the period the assets are separated from the other goods and raw materials of the borrowers / farmers and are closely monitored or taken into custody by an inspection company. Inspection company manaages the collateral and reports to the bank usually on a daily basis. Such schemes are called Collateral Management services or CMA (short for collateral management agreement).