Oschadbank has outlined the main reasons for rejecting energy loans
This was stated by Natalia Butkova-Vitvitskaya, a member of the bank’s board, during the Energy Finance forum.
According to her, on average, 8 out of 10 projects receive a positive decision, but actual financing is granted for approximately 65% of applications.
She explained that the bank actively uses interest rate compensation mechanisms and risk-sharing guarantees from the state and international partners, which allows businesses to enter into projects with minimal collateral and a small down payment.
“We won’t ask you for hard collateral straight away. We’ll provide risk-sharing on your behalf – a guarantee mechanism from the state or a partner,” emphasised the Oschadbank representative.
At the same time, the bank is scrutinising borrowers’ financial transparency much more rigorously. According to Butkova-Vitvitskaya, the main reasons for rejections in large projects remain unreliable financial models, a problematic credit history, or an inability to explain the origin of the own contribution.
“If a business cannot explain the source of its own contribution, that is also a reason for non-funding,” she noted.
Oschadbank has also warned businesses about the lengthy project approval times. For micro-businesses, decisions are made on average within seven days; for small businesses, in around 20 days; and for medium-sized businesses, in about 25 days.
Butkova-Vitvitska added that one of the bank’s priorities for this year is to reduce application processing times and improve communication with clients through personal managers.
“We will be asking questions about finances. This needs to be taken into account when implementing the project,” she emphasised.
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