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EBRD, EU and BCR support SMEs across Romania
Bank provides second €20 million loan to largest bank in Romania
Romania's largest bank, Banca Comerciala Româna SA (BCR), made more than 500 loans to small and medium-sized enterprises in only 17 months following a €20 million loan from the European Bank for Reconstruction and Development. Today, BCR will build on that success with a second €20 million loan from the EBRD to support Romania's local entrepreneurs.
The EBRD loan is being complemented with €1.8 million in technical assistance and other financial support from the European Union to support staff training and to ensure successful implementation of the loan. These amounts are part of the EU/EBRD SME Finance Facility, a programme of the European Commission in cooperation with the EBRD to promote SME growth and development across the 10 countries expected to join the EU.
Hildegard Gacek, Director for Romania at the EBRD, said the Bank's first credit line to BCR, in 2001, has been extremely successful, benefiting entrepreneurs across the country. Ms Gacek said that BCR's extensive branch network manages to reach clients in remote areas, as well as in Bucharest. This second loan will provide BCR with the means to help more small businesses to gain access to finance, and this will help strengthen the country's private sector, Ms Gacek added.
Jonathan Scheele, Head of the European Commission Delegation in Romania stated: "Access to capital represents one of the major problems faced by the SME sector not only in Romania, but all over the world. By their very nature, SMEs do not dispose of large funds. This is where the banking sector steps in, and sometimes the authorities too. In this sense, this Facility financing SMEs development projects provides not only low cost finance, but also creates an incentive for banks to expand and maintain on a long run, their financing for SMEs operations."
Banca Comerciala Româna has 282 branches and sub-branches throughout Romania, giving it a wide reach among the country's population of over 22 million. Nicolae Danila, Chairman and CEO of BCR, said that BCR and the EBRD, supported by donor contributions from the EU, have, over the last two years, worked together successfully to implement the SME facility in Romania. He said BCR views its cooperation with the EBRD as an excellent instrument for developing SMEs in Romania.
The SME Facility was launched in 1999 under the Phare Programme - the main channel for the EU's financial and technical cooperation with the EU accession countries - with the EBRD, to encourage the growth and development of SMEs by providing access to loans, leasing and equity finance from local financial intermediaries. The budget earmarked for the Phare Programme as a whole is about €1.5 billion a year.
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