Microfinance in Russia: Broadening Access to Finance for Micro and Small Entrepreneurs

In Russia, small-scale entrepreneurship has emerged in response to the collapse of state-ownership and unemployment in the early 1990s. Small businesses typically lack adequate collateral and credit history, making them 'unbankable' by the mainstream financial sector. To fund their businesses, micro-entrepreneurs are forced to rely on funds from family and friends, or money lenders.

Microfinance institutions of four types have emerged to meet the unfulfilled financing needs of micro-entreprene…