Travel to Russia: A banker talks small-business loans | Guest Column

In April I was invited to travel to Moscow to speak with Russian bankers about the U.S. Small Business Administration’s lending program.
The Russians have used a small-business loan guarantee program for the past three years that is not working as well as they had hoped. My presentation explained when and why the SBA program was formed, how it has evolved during the years, how it is funded, the ups and downs, the different programs offered and how the program functions today. I stressed that banks in the United States operating SBA-dedicated lending platforms tend to have the most success with the SBA program. Because of their knowledge of small-business lending, those banks generally are able to offer the best service to their customers.
At a two-day meeting held at the Russian Ministry of Economic Development, I spoke with several Russian officials and a group of approximately 70 Russian business-loan officers. The first day was mostly filled with my presentation, and the second day provided time for questions and answers. The Russian bankers were particularly curious about the roles of taxpayers and the government, as well as the lenders’ decision-making process.

I explained that SBA works with banks to help business owners start and expand small businesses. Lenders such as me underwrite the loans to fund projects. SBA — the U.S. government — then guarantees a portion of the loan against default.
While responding to questions, I also learned about the Russian business-loan program and noted some of the differences from ours. For example, the Russian program is centralized, and the American program is localized. As best as I could determine, one of the main differences between the Russian program and that in the United States is that the Russian government allocates a specific amount of funds to their banks for guaranteed loans every year. Also, though neither country fixes interest rates, the rates in Russia have a much larger degree of variation. In response to questions about the decision-making process in providing SBA loans to businesses, I offered a few tips from my own experience.
I was impressed by the speed and accuracy of the three translators who assisted with my presentation. People have asked me about the language barrier, but I found little difficulty with it as several conference attendees spoke fluent English.
I stayed in Russia for a week, in a hotel run by the Russian Orthodox Church. On my first night, I was treated to a “dinner for experts” and was pleased to meet a fellow Rotarian. I did notice a few differences in Russian and American cultures, especially the food, and was comforted to find a simple Twix candy bar.
My last meal in Russia was particularly memorable and consisted of four courses, with fish as the grand finale, compliments of Vlad Likholetov, a research assistant professor in the Chemical Engineering Department at the University of Missouri, who also attended the conference.
My trip was sponsored by the University of Missouri School of Engineering and CRDF Global, an independent nonprofit organization that promotes international scientific and technological collaboration through grants, technical resources and training.