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Supporting sound banking in Moldova
EBRD extends micro and trade finance to CB Banca Sociala
The EBRD is extending a €3 million loan to CB Banca Sociala, one of the
leading banks in Moldova, for on-lending to local micro and small enterprises.
In addition, the Bank is also increasing Banca Sociala’s limit under the Trade
Finance Programme by $3 million to a total of $4 million. The EBRD’s Trade
Finance Programme supports trade to, from and within the Bank’s countries of
operations.
The EBRD’s credit line will be used for loans up to $100,000 to micro and
small enterprises and comes under the Moldova Microfinance Framework, which
was established to meet the growing demand for finance from micro and small
enterprises in the country. Loans are being provided to commercial banks for
on-lending and are accompanied by an intensive technical assistance programme.
Participant banks must have transparent ownership structures and follow best
practice in terms of banking business and corporate governance.
Banca Sociala was established in 1991 and today has one of the largest branch
networks in Moldova with a strong rural presence, where demand for
microfinance loans is particularly strong due to limited access to finance for
local entrepreneurs. Banca Sociala is a universal bank and provides a full
range of banking products and services. It has demonstrated its commitment to
best practice corporate governance standards and transparency.
Banca Sociala started developing its microfinance portfolio in February 2006
with the support of team of consultants mobilised by EBRD under the Moldova
Microfinance Framework. To-date the bank has provided more than 120 loans for
almost $600,000 to micro and small businesses. The EBRD funding will allow
expanding these activities and attracting new clients.
Michael Davey, EBRD Director for Caucasus, Moldova and Belarus, said the loan
provides the EBRD with the opportunity to support the expansion of one of the
largest and most successful private banks in Moldova into the microfinance
sector. The credit line will facilitate local entrepreneurs’ access to finance
as well as meeting their demand for longer term financing. The EBRD will thus
stimulate both financial intermediation and the development of the financial
sector in Moldova.
Vladimir Suetnov, president of Banca Sociala, said the new loan marks an
important step in the cooperation with the EBRD. It indicates the confidence
an international financial institution is having in our bank. The funds will
be made available to micro and small enterprises to support their growth with
easier access to finance. At the same time the loan will allow Banca Sociala
to attract new clients and consolidate our position in this significant market
segment.
To-date the EBRD has signed 48 projects in Moldova worth more than €205
million and mobilised more than €125 million from its partners. The country is
part of the EBRD’s Early Transition Countries Initiative which aims to
stimulate the economy in the Bank’s lowest-income countries by using a
streamlined approach to financing more and smaller projects, mobilising more
investment, and encouraging reform.
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