Question

What was the “Loans for Shares” program, and why did it arise? Russian Econ

Answer 1

In 'loan for shares' scheme, various large state industrial assets such as state-owned shares in Norilsk Nickel, Yukos, Lukoil, Sibneft, Surgutneftegas, Novolipetsk Steel, and Mechel, etc. were leased using auctions for money which the government borrowed from commercial banks. The  'loan for shares' was proposed by banker Vladimir Potanin and it was supported by the deputy prime minister Anatoly Chubais. The 'loan for shares' scheme originated in Russia in 1995 when the government faced a severe fiscal deficit and the government needed funds for the 1996 election.