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EBRD channels trade support through local Moldovan banks
To encourage intra-regional trade and to provide further support to Moldova’s banking sector, the European Bank for Reconstruction and Development (EBRD) today signed trade facilitation agreements with two Moldovan banks: Moldova-Agroindbank and Victoriabank. The trade facilitation programme in Moldova is expected to total US$ 5 million (EUR 4.7 million). It will allow the participating banks to develop and expand trade finance activity to benefit the entire Moldovan economy.
The last 15 months have seen a significant decline in Moldovan exports and imports, making trade facilitation more important than ever. The EBRD places a high priority on supporting trade in the region, and the Moldovan banks are part of this strategy.
"As a consequence of the region’s economic turmoil over the last 15 months and the decline of local and regional trade, the availability of trade finance through conventional instruments is significantly reduced for Moldovan banks," said Kurt Geiger, Business Group Director for the EBRD. "The EBRD facility will stimulate international and regional trade, increasing both volume and the overall availability of trade finance in the region. It will send a strong signal that trade can be financed through local banks."
"The new programme will have a significant and positive impact on the development of Moldova’s foreign trade," said Natalia Vrabie, Chairwoman of Moldova-Agroindbank. "This is a strong indication of the continuing support provided by the EBRD to the Moldovan economy and to the Moldovan banking system."
Victor Turcanu, Chairman of Victoriabank, added: "The programme will allow participating Moldovan banks better access to the international markets. The selection of the participant Moldovan banks was based on strong professional and banking criteria and therefore our participation sends a positive signal to investors."
The EBRD launched its Trade Facilitation Programme (TFP) in January 1999 to encourage international and intra-regional trade in central and eastern Europe and the Commonwealth of Independent States (CIS). The EBRD issues guarantees to local intermediaries across all of its countries of operations, increasing their ability to support import and export transactions. The EBRD has recently extended its TFP to cover advance payment guarantees and other instruments in addition to letters of credit. The amount of the guarantee has been extended to up to 100 per cent of the face value of the underlying trade instrument. Also, the procedure for the issue of EBRD guarantees has been streamlined to facilitate a faster approval process.
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