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Familiarization Tour - Feedback

The Russian delegation members have been asked to provide a description of their impressions of the U.S. small business system and what may be the relevant aspects for private sector development in Russia. As this tour will be part of an on-going relationship with Russia, not a one-time effort, SBA expects there will be other opportunities for feedback from the Russian participants.

Summary account on familiarization tour has been developed by the MAP and AMM experts. It focuses on the U.S. federal and state agencies' practices in terms of their applicability in Russia.

Washington agenda:
A) U.S. Small Business Administration. Russian participants took interest in two of four basic types of SBA lending and equity investment programs: the 7(a) Loan Guaranty Program and the 7(m) Microloan Program. They are also interested in how SBA makes funds available to qualified nonprofit organizations, which act as intermediary lenders, how intermediaries also provide management and technical assistance to help ensure success. Other noteworthy nuances: eligibility requirements, loan terms, use of loan funds, loan terms, credit requirements, collateral requirements, applying for a microloan.

The Russian delegation members were impressed with the SBA's website (www.sba.gov) which proved to be one the most advanced sites dedicated to SME activities.

B) U.S. Civilian Research and Development Foundation for the Independent States of the Former Soviet Union. Its experience in advancing the transition of military scientists to civilian work by funding collaborative non-military research and development projects as well as in helping move applied research to the marketplace is worthy of highlighting. Innovations-oriented programs are what Fund for Assistance to Small Innovative Enterprises and National Business Incubators Association of the Russian Federation can develop together with the CRDF under support of the MAP.

C) Overseas Private Investment Corporation. OPIC provides political risk insurance, financing and a variety of investor services to encourage US private investment in emerging economies around the world helping America's small businesses grow. Russian growing small businesses may have an interest in highly structured, complex projects financed either by direct loans from OPIC's own funds or through OPIC guaranties to U.S. private investors. Private direct investments are of special interest for the Russian economy.

D) EXIMBANK. Negotiations with the senior EXIMBANK officials serve as a continuation of our efforts within the framework of the following agreements: Memorandum of Cooperation between the State Committee of the Russian Federation for Support and Development of Small Business and the Export-Import Bank of the United States of November 4, 1997 and Framework Agreement regarding support for U.S. exports to small businesses in the Russian Federation between the State Committee of the Russian Federation for Support and Development of Small Business, the Federal Fund for Small Business Support and the Export-Import Bank of the United States of March 11, 1998. Hopefully it will give an impetus to the future U.S.-Russia cooperation in the area of microloan programs.

Maine agenda:
Maine is equipped with comprehensive set of "performance-based" economic development resource and incentive tools designed to help businesses thrive and expand in the state. The delegation members are interested in bringing together Russian regions and American states to promote their mutual economic and cultural cooperation.

A) Financial Authority of Maine. The Russian participants appreciated its experience as an independent state agency working closely with the financial, economic development and business communities at state level to provide financing solutions for Maine companies of all sizes and at all stages, from entrepreneurial start-ups to established firms. It can give the great opportunity for Russian non-governmental regional and local agencies to make use of FAME's experience in their current activities.

B) The Russian participants also highly appreciate activities of The Service Corps of Retired Executives, Coastal Enterprises Inc. as regional/local BSIs and effective SBA borrowers.

C) U.S. Department of Agriculture. Their Business and Industry Direct Loan Program creating and maintaining employment and improving the economic and environmental climate in rural communities is of considerable interest as well.

Summing up hereinafter are the pivotal aspects in terms of applicability of SBA's experience in Russia:

1. System of government support for SMEs in the United States;
2. Effective interaction and feedback between federal and state authorities, federal and local offices of the SBA (Maine as an example);
3. Provision of financial solutions to small businesses (microloan and financial guaranty mechanisms at the federal, regional and local levels);
4. Collaboration in the sphere of innovative technologies, technologies' transfer and business incubation;
5. Provision of information support with regard to small businesses.

These priorities also correspond to the main areas of the U.S.-Russia Small Business Working Group activities and will be taken into consideration in developing a Federal Program for small business support in a period from 2002 to 2004.

Russian officials became acquainted with:
· The role of the private sector and small business in a market-based economy;
· Small business service delivery system, both government and non-government;
· The local small business support system and interactions among individuals, community and small business support organizations;
· The contribution of small business to U.S. economic growth and development and its potential applicability to Russia.

Russian officials look forward to continuing helpful and fruitful cooperation with SBA within the framework of the Bilateral Commission on economic and technological cooperation and respectively SBWG Action Plan of December 11, 2000.

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