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Penza city administration looks to take 160-million loan

16:05 | 24.04.2015 | Economy

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Penza, 24 April 2015. PenzaNews. The financial department of Penza city is searching for a bank to take a loan of 160 million rubles with an acceptable interest rate, said the head of the department Olga Zavyalkina during the eighth regular City Duma session on Friday, April 24.

Penza city administration looks to take 160-million loan

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“Today we will find out who applied for our first procurement request of 160 million rubles. The loan we need is for 3 years for 19.13%,” she said, adding that currently they have only two applications.

She also explained the reasons behind the interest rate.

“Before announcing it [the procurement procedure], we were contacting all the banks on the loan. ‘Promsvyazbank’ offered the lowest interest at 19.13%, and we based the request on that. […] Unfortunately, Sberbank, VTB are offering only a 22-25% interest loan,” she added.

The budget used no loans in Q1 2015 so far, Olga Zavyalkina added.

In his turn, the Penza mayor Yuri Krivov added that VTB and Sberbank were recommended to credit regions with an interest rate of 17.5%, according to information he learned from a letter by head of the Russian Ministry of Finances Anton Siluanov.

“But when you start talking to our colleagues from a bank, they say the letter was addressed from A to B with nothing on their table. There is much to go from a recommendation to its implementation. So we went on to put out a small sum of 160 million rubles. It is a test project, so to say, to see what is on the market and which offers they have,” he said.

The officials are planning to take “a bit less than” 1,400,000,000 rubles to satisfy the budget, Yuri Krivov stressed.

“And we need to find this sum. We will not get equal on expenses if we don’t see this sum in profits. I expect the creditors to react on lowered state interest and other state intentions. We will be seeking additional service money. We need to find about 70 million rubles more to get this over-the-billion sum,” he concluded.

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