The 'B' rating indicates that the microfinance institution 'Business Microfinance Fund of the Republic of Crimea' (BMFRC) qualifies as a microfinance institution with satisfactory creditworthiness. The full or partial default risk is moderate. The rating assignment was based on the Credit Rating Methodology for Microfinance Institutions rev. October 12, 2015.

The rating downgrade and the negative outlook reflect the soaring risk of cash losses due to the highly risky investment policy of BMFRC. Earlier, AK&M Rating Agency highlighted the microfinance institution's untypical strategy of depositing free cash funds for income earning purposes and expressed concern about the Fund's venturous depositary policy. BMFRC placed RUB 52.6 million (almost half of its total capitalization as of January 1, 2016) on deposit accounts with JSC FIA-BANK. On April 08, 2016, the Bank of Russia made a decision to revoke the license of this credit institution (Order no. OD-1179). This revocation can reduce the Fund's capitalization by 45%, which will substantially curtail its capacity to provide support to small and medium-sized businesses in the Republic of Crimea.

AK&M Rating Agency assigned a credit rating to BMFRC for the first time on February 18, 2016. All rating action announcements are available on the akmrating.ru website.

For estimation purposes, we completely rely on the reliability of information provided by the microfinance institution. The rationale for AK&M Rating Agency's judgment on the rating may include information acquired from other sources we deem to be reliable; however, the agency does not check the input data exhaustively and disclaims all responsibility for their possible errors.

The rating assignment is based on the monitoring results of the current credit rating assigned to BMFRC and the Credit Rating Methodology for Microfinance Institutions rev. October 12, 2015.

The rating, along with any information and conclusions provided in this press release, only conveys our creditworthiness opinion and shall not be construed as a recommendation to purchase or sell securities, or to lend funds.

AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.

AK&M Rating Agency

Ul. Gubkina 3, Moscow, Russia

www.akmrating.ru

Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.