Source: Financial Mirror
Article available here.
The European Bank for Reconstruction and Development is continuing to support the growth of Romanian micro enterprises and start-up businesses via a new loan for Banca Transilvania (BT), the largest and fastest growing locally-owned Romanian bank.
The finance includes the first commercially syndicated loan from the Romanian Micro Credit Facility Framework targeted specifically at Romanian micro enterprises, a sector where some 79% of businesses still have difficulty securing access to funding.
The EBRD syndicated loan to Banca Transilvania for a total of €15 mln successfully combines EBRD and donor on-lending funds with commercial financing: €6 mln is coming from the EBRD and €4 mln from the Romanian government and the European Commission through the EBRD-administered Romania Micro Credit Investment Special Fund. The remaining €5 mln will be syndicated to Caja Madrid. Technical assistance of up to €300,000 will also be provided, entailing specialist advisory services to increase lending to new entrepreneurs and small businesses.
This project builds on the success of previous equity investments and loans to Banca Transilvania since 1999, which have helped finance over €30 mln in 776 SME loans across the country.
Chikako Kuno, EBRD’s Director of the Group for Small Business, said supporting Banca Transilvania with its extensive branch network will help to make a substantial contribution to the underserved micro sector in Romania and development of financial services in the country. The entrepreneurial spirit of Banca Transilvania is matched to support this critical growing sector of the Romanian economy. The smallest of businesses in most rural parts of Romania as well as start-up micro businesses stand to benefit from more access to finance to expand their business.
Further, EBRD’s support of businesses in rural parts of Romania demonstrates the Bank’s commitment to the development of this sector and is a continuation of EBRD’s strong and productive cooperation with local investors, Kuno added.
Banca Transilvania began its operations in 1993 with its headquarters in the north-west town of Cluj-Napoca. Today Banca Transilvania is the largest private locally-owned Romanian bank, with 394 branches across the country, and it was the first bank to be listed on the Bucharest Stock Exchange in 1997. Shareholders are the EBRD, Romanian Financial Investment Companies – Banat-Crisana and Oltenia and many other investors with smaller stakes.
The EBRD, EU and the Romanian government launched a new €88 million Romania Micro Credit Facility Framework in 2006 with the aim of providing non-bank microfinance institutions and commercial banks servicing the MSE sector with necessary funding and technical assistance to expand their lending to the smallest and micro enterprises in Romania as well as lending to start-up micro entrepreneurs.
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