Volume II of the Nizhny Novgorod Business Encyclopedia is devoted on financial, investment and associated organisations of Nizhny Novgorod province and provides details on their activities on the financial market in one of the leading regions of Russia.

Privatisation

In terms of privatisation effectiveness in the areas of production, construction, transport, trade, public catering and public utilities, Nizhny Novgorod province leaves far behind other regions of Russia. Since the formal launch of privatisation over 1000 enterprises have been transferred too private and mixed ownership. These enterprises are covering 70% of the overall industrial output.
Over 400,000 flats have been privatised, 20,000 trucks, 1700 buses and pick-ups are put into private hands.
For the first time in Russia the rented retail shops are being sold off to private owners. The wholesale warehouses are reorganised into joint stock companies.
About 80% of collective and state farms are run now as partnerships and joint stock companies, 3,600 private farms have been formed.
The first in Russia pilot programme aimed to transform collective and state farms to private-run is under way. Since 1993 1000 mini-bakeries, cheese dairies, sausage cookeries and mills are in operation.
For the outstanding services to the State in completing the first stage of privatisation, Mr. B.Nemtsov, Governor of the Nizhny Novgorod Region has been awarded the Medal of Order for Merit, 2nd Degree, by by the President of RF.

Municipal and Corporate Loans

The Administration of the province has pioneered in municipal loan emissions.
The first two government loans of the province as well as the accommodation loan and the Dzerzhinsk town loan have produced positive results.
Have been issued the province road and other municipal loans.
As the Nizhny Novgorod Administration has never failed to pay off the drawn loans, the Nizhny Novgorod bonds are much favoured as a reliable means of funds investment and are purchased by many commercial banks including Moscow.
The first time in Russia since 1917, the province saw an emission of corporate securities. AO GAZ issued the bonds for 200 bln rubles worth, the acquired finance will be used for GAZ-3302, a vehicle with a diesel engine.
The bonds of nominal volue of 100,000 rubles, 300,000 rubles, 1 mln rubles, 3 mln rubles were issued with 10% of interest rate in USD equivalent.
In addition the bonds holders are able to take part in a draw and win cars, flats, land lots and toures.

Finance-Industrial Groups

Finance Industrial Groups (FIG) are expedient in combining resources and modern technologies for production of competitive goods, therefore the province shows strong dedication for their formation. FIG Ruskhim (11 plants, 3 research institutes, 6 banking and finance commercial structures) comprises four enterprises of Dzerzhnisk: The Chemistry and Technological Polymers Research Institute, PO Zarya, PO Korund and PO Orgsteklo.
GIG Finance-Metal-Pipes-Gas (Incombank, the Orsk-Khalilov and Tzheliybinsk Steel Works, RAO Gazprom) includes the Vyksa Steels Works.
FIG Megaclass is in process of formation in Nizhny Novgorod.
The group will combine four holdings: machine building, chemistry technology, electronic and construction.
FIG Interbank Investment House includes AvtoGAZbank, NBDbank and other finance-credit institutions has been registered.
In September 1994 the first Russian oil-chemistry cartel has started its operation.
The cartel includes AO Norsky (Kstovo), AO Kaprolaktam, AO Orgsteklo (Dzerzhinsk).

Territory-Industrial Zones

Nizhny Novgorod province has pioneered in formation of the territory-industrial zones (TIZ) to tackle the problems of construction. They are designed to encourage a private investor to contribute to conversion programmes of defiance enterprises gone bust.
TIZ members are granted a 5-year investment-tax loan within the funds due to the federal budget.
They enjoy tax relief from the payments to the province and local budgets. They take advantage of the free-warehouse customs regime, i.e. free of customs duties and VAT.

The first TIZ is marked by territories of three enterprises: AO Lazur Sormovo Plant, AO Petrovsky Plant and NPP Salut.
The economic interests of the major enterprises and private investors are based on privatisation of Salut—a state-owned enterprise with an opportunity of a rent with a further buying out of the enterprises and companies.

Entry to the World Economy

Open-minded development of the province economy together with the dedicated authorities are a good encouragement for domestic and foreign partners and investors. Solid industrial and trading ties with regions of Russia, CIS and western countries provide for economic stability. Nizhny Novgorod and the province have collaborative links with Northern Rein-Westfalen and Stadt Essen (Germany), Lombardia (Italy), Philadelphia (USA), Brno (Czeck Republic), Linz (Austria).
The province has three enterprises with foreign capital: AO Volga ( Balachna Paper factory), AO Khiminterengineering (Dzerzhinsk), Transal-AKC (fast water and amphibious vehicles). 200 enterprises are operating with foreign investments, a wide range of joint technological programmes have been developed. Berstoff GmbH (Germany) has contributed to construction of PCV-tissue for food products manufacturing complex, which is the first in Russia and the third in the world; agreements are signed with BISON WERKE (Germany) for development of utilisation and deep processing of wood, with Ikarbus (Yugoslavia) on passenger bus production and many others.
The World Bank and the Nizhny Novgorod Administration have signed an agreement on joint development of a project of living accommodation construction (other participants are: Saint Petersburg, Moscow, Barnaul and Tver). The bank total project input is USD 400 mln, including renovation of the whole town infrastructure.
Four firms represent the European Bank of Reconstruction and Development:
—JPC for rouble micro-credits;
—Caresbac for share participation in small businesses;
—Shorebank for hard currency loans for businesses involved in manufacturing and services;
—SQW—consulting services for potential EBRD clients.
InterOxydental (USA)—a realtor company with offices in Nizhny Novgorod, Moscow, Saint Petersburg, offers a range of services, including evaluation of real estate, marketing and EXPO (buyer-seller payments).
It provides also international money transfers and consultations on foreign legal issues. The Nizhegorodsky Bankirsky Dom (NBD-bank) is one of the few directly linked with the World Bank and the EBRD. An agreement with the French Bank Association (CIC Banques) makes the NBD-bank guarantees be acceptable in France.
Incombank provides substantial loans for the Nizhny Novgorod enterprises involved in development and production of export products, supported by large-scale credit lines of western investors.
The proven has 33 grants of Soros Foundation.
The local customs service includes a number of terminals with the headquarters of the Povolzhsky Regional Customs Control Administration.
To boost the market reforms the province hosts a large number of international and national organisations: the World Bank, The European bank of Reconstruction and Development, the International Monetary Fund, the Peace Corps, the Public Corps for Democracy, the American International Development Agency, the Westdeutsche Landes Bank and other organisations.
The development of education and training of the local personnel required by the market environment is supported by the Iowa University, Habard Management College, the Open Business University, the European Fund of Management Development, the American Business Centre with Thunderbird High School of International Business and other training centres, universities, business schools from the USA, the UK, France, Spain, Sweden.
In the area of engineering and technology transfers the province organisations are collaborating with the British Know-How Fund, the New York Science and Technology Fund, Cevelli Cosulaney Ltd, KPMQ (UK), the International Institute of Applied Technology (Belgium), Deutsche Industrie Consult, the Economic Research Fund of the Amsterdam University, Cress Centre, the Berlin University Centre and other numerous research and consulting organisations.