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EBRD works with Moldovan bank to boost MSEs
Mobiasbanca receives $3 million credit line to support local micro and small enterprises
The European Bank for Reconstruction and Development is extending a $3 million
credit line to Moldova’s Mobiasbanca to support its lending to local micro and
small enterprises (MSEs).
Mobiasbanca will be the first Partner Bank (PB) to receive funds under EBRD’s
Moldovan Microfinance Framework (MMF), a $25 million facility. MMF provides
funds to eligible local commercial banks for on-lending to MSEs.
Mobiasbanca is the fifth largest private bank in Moldova. Established in 1990
it now has seven branches in Chisinau, six outside the capital and 42 outlets
throughout the country. The credit line provides an opportunity for this
dynamic bank to expand further into the microfinance segment in Chisinau and
the rural areas.
The facility enables the EBRD to reach out to more creditworthy local small
businesses and to promote entrepreneurial activities throughout the country.
Sub-loans between $100 and $100,000 will be on-lent by Mobiasbanca to existing
and new small business clients so they can set up new business or expand
existing activities.
MMF is also supported by technical assistance valued at €1.3 million from the
ETC Multi Donor Fund to strengthen the Partner Bank’s MSE operations,
establishing the most efficient MSE lending procedures and designing new
credit products for the sector. It will also help participating banks to
develop the necessary skills and capacity to undertake MSE lending safely and
profitably.
The potential market for MSE lending in Moldova is huge, says Francis Delaey,
head of the EBRD office in Moldova. Small businesses represent nearly 90% of
the total number of enterprises in the country. The Credit Line extended to
Mobiasbanca will improve access of these enterprises to loans and will promote
competition in the banking market.
Serghei Cartasov, First Vice Chairman of the Board of Mobiasbanca said: “We
greatly appreciate EBRD’s cooperation in supporting Mobiasbanca’s strategic
priority of expanding into the micro-lending sector”.
The EBRD’s ETC Initiative, launched in 2004, aims to stimulate market activity
in the Bank’s lowest- income countries of operations by using a streamlined
approach to financing more and smaller projects, mobilising more investment,
and encouraging economic reform. The initiative is part of an international
effort to address poverty. The Bank will accept higher risk in the projects it
finances in the ETCs, while still respecting the principles of sound banking.
EBRD has supported over one million small enterprises throughout Eastern
Europe, Russia, Central Asia and the Caucasus through its MSE programmes.
EBRD has worked with over 84 commercial banks and non-bank microfinance
institutions to establish or expand specialised micro and small business
finance units and has lent €560 million to facilitate close to €8 billion in
loans to micro and small businesses in the region..
The EBRD is the largest foreign investor in Moldova with almost €201 million
in 44 projects across the country.
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