Contract financing is a form of financing wherein the Bank provides funds to finance works that the borrower has to perform under a particular contract with a third-party buyer of goods and/or services. It is collateralized mainly by the expected proceeds from the financed contract after the product and/or services are successfully provided to the contractual buyer.
With a view to boosting trade relations between firms within and between our Bank’s member states, the Bank provides contract financing. Contract financing is designed for firms that have been awarded a contract with a customer, but do not have enough funds available to purchase raw materials and intermediate goods to be used to fulfill the contract or pay their employees. Depending on the structure of the particular contract, the Bank can either disburse the financing to the client or directly pay the client’s suppliers involved in the contract.
Product features
Specifics of supporting SMEs through local banks and participation in syndicated loans of other development institutions imply a wide range of possible transaction terms for consideration by the Bank. Direct support to individual SMEs is provided by the Bank as part of an integrated approach and is aimed at long-term cooperation.

Target Clients

SMEs that need to bridge a cash-flow gap that arises under a signed contract for the performance of work or the provision of a service
SMEs that seek to expand their operations into new markets and new geographies


Subsidizing of SME portfolio
Local banks are able to fund SME portfolio at a lower rate
Risk sharing
By participating in SME support programs and corresponding targeted syndicated loans of other banks and development institutions, the Bank helps to share the high risks inherent in the segment
Direct support
The Bank does not have a limit on the minimum transaction amounts and is ready to consider direct lending to separate SMEs aimed at developing their business and establishing long-term cooperation with the Bank
Terms of provision
The availability of the credit line is generally up to 2 years, while the duration of individual tranches depends on the terms and timeline of the underlying contract
The line of credit should be collateralized by the expected proceeds from the financed contract as well as by other forms of collateral, such as production machinery and equipment, if available
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