To start up business in Russia people do not borrow money in the market – they borrow money from each other. Less often, they happen to “inspire” another company with their idea (in such case the company generally invests into the enterprise (buys its stock) and provides a loan). Specialized venture capital funds have already emerged in Russia, but they are mainly involved in high-tech projects financing.

 ‘Our bank works with small businesses, including innovative projects,’ says A.Artyukh, Head of the Credit Department, Russian Banking House. ‘But the share of venture loans in our bank’s credit portfolio is currently immaterial due to low attractiveness of projects and lack of real guarantees.’

According to experts, it is organizations with foreign interest that will be first to actively enter the Russian venture capital market. Generally, they (KMB-Bank, Delta Group) do it now. Yet so far foreigners do not fund ideas, but rather enterprises that have been at least half a year in the market and demonstrated their sustainability and potential.

Specialists say that, of course, banks will engage in venture capital financing only when they exhaust fully the opportunities to earn money in the debt market and as soon as competition starts to edge them out. Due to this, most likely it is small banks and companies driven out by competition to other still vacant market niches that will have to enter the venture business first. According to bankers, multiple factors will speed up the venture capital market development at the same time. First, foreign organizations will engage into the venture capital business. Most probable, they will start with large projects and will participate in the context of specialized ‘social’ international programs (e.g., financed by EBRD, etc.) aimed at the Russian venture capital market development. The Government will support high-tech projects and entrepreneurship in certain fields. ‘The Government has to determine key areas and directions that it will support through guaranteed venture projects financing,’ says A.Zagrentchuk, Deputy Head of Credit Transactions Department, Rosbank.

Gradually, private investors and, certainly, banks, will engage into the venture business. Bankers, as experts say, will at first provide intermediary services connecting their clients who are ready to start a new business and venture funds willing to finance them. Banks will then, possibly, undertake to prepare projects and later take some risk, gradually becoming more and more involved into the business.