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EBRD finance for Romanian banks boosts regional trade
Regional trade in south-eastern Europe received a boost when the European Bank for Reconstruction and Development (EBRD) extended trade finance guarantee agreements to two Romanian banks: Banca Comerciala RoBank and Demir Bank Romania, totalling approximately €6.6 million.
"These guarantees will allow participating banks to develop trade-financing, which is of great benefit to the Romanian economy and the region as a whole," said Salvatore Candido, EBRD Country Director for Romania. "The EBRD wants to encourage greater regional trade, and the Romanian banking sector is key to making that happen. It is our hope that we can sign up further Romanian banks in the future."
Following the economic downturn in Romania in 1999 and a reduction in local regional trade, the availability of trade finance for banks shrank considerably. Many businesses were left with no practical way to finance the sale or purchase of goods or services in other countries. Now, by making trade finance more widely available, the EBRD hopes to stimulate both international and intra-regional trade, and strengthen the Romanian banking sector at the same time. "We want our message to be clear: trade can be financed through banks," Mr. Candido added.
Selcuk Saldirak, Chairman of Demir Bank Romania, said: "This programme has a double significance for all participating banks: first, it represents the start of fruitful cooperation with the EBRD, which we hope to consolidate in the future; second, it will have a significant positive impact on the development of Romanian’s foreign trade."
"The new programme will have a positive impact on the development of Romania’s foreign trade," added Mustafa Ayan, President of RoBank. "This is a strong indication of the continuing support provided by the EBRD to the Romanian economy and to the Romanian banking system."
The EBRD relaunched its €100 million Trade Facilitation Programme in January 1999 to encourage international and intra-regional trade across the region in which it operates: central and eastern Europe and the Commonwealth of Independent States (CIS). The EBRD issues guarantees to local intermediaries, such as banks, increasing their ability to support import and export transactions.
The EBRD extended the programme 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 issuance of EBRD guarantees has been streamlined to produce a faster approval process.
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