MOSCOW, November 24, (RAPSI) - Support of small and medium businesses by state run Vnesheconombank (VEB) bank is inefficient, Interfax reports on Monday, citing a statement made by the Russian Audit Chamber.

Auditors made this conclusion after inspecting the Russian Bank for Small and Medium Enterprises Support (SME Bank) and state-run banks supporting small and medium-sized businesses over 2012-2013. Vnesheconombank supports small businesses through SME Bank.

Small and medium enterprises (SMB) receive loans at the average final rate of 12.7% per year, which is not significantly different from the average market rate in 2012-2013.

The Audit Chamber found that SME Bank did not develop a system to control the actual rate under which the end-use borrowers receive loans. “SME Bank’s partner banks do not include their actual active rates (and extra charges) in their reports, which does not provide data on efficient costs of the loans,” an auditor explained.

The Audit Chamber also concluded that SME Bank’s share in the SMB loan market was around 1.5% as of May 1, 2014. At the same time, the share of the four state-run banks in this segment was 40% in 2012-2013, with Sberbank alone taking up 24.3%.

It was also revealed that SME Bank’s strategy for 2013-2015 does not take into account the macroeconomic situation and changes to the budgetary policy.

VEB has a legal status of a state corporation and aims to boost Russia's economic competitiveness, to diversify it and stimulate investments, according to the bank's own website.