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EBRD boosts funding for Romanian micro businesses
Finance to Banca Transilvania to help promote private sector growth
The European Bank for Reconstruction and Development is continuing to support
the growth of Romanian micro enterprises and start-up businesses via a new
loan for Banca Transilvania (BT), the largest and fastest growing
locally-owned Romanian bank.
The finance includes the first commercially syndicated loan from the Romanian
Micro Credit Facility Framework* targeted specifically at Romanian micro
enterprises, a sector where some 79 percent of businesses still have
difficulty securing access to funding.
The EBRD syndicated loan to Banca Transilvania for a total of €15 million
successfully combines EBRD and donor on-lending funds with commercial
financing: €6 million is coming from the EBRD and €4 million from the Romanian
government and the European Commission through the EBRD-administered Romania
Micro Credit Investment Special Fund*. The remaining €5 million will be
syndicated to Caja Madrid. Technical assistance of up to €300,000 will also
be provided, entailing specialist advisory services to increase lending to new
entrepreneurs and small businesses.
This project builds on the success of previous equity investments and loans to
Banca Transilvania since 1999, which have helped finance over €30 million in
776 SME loans across the country.
Chikako Kuno, EBRD’s Director of the Group for Small Business, said supporting
Banca Transilvania with its extensive branch network will help to make a
substantial contribution to the underserved micro sector in Romania and
development of financial services in the country. The entrepreneurial spirit
of Banca Transilvania is matched to support this critical growing sector of
the Romanian economy. The smallest of businesses in most rural parts of
Romania as well as start-up micro businesses stand to benefit from more access
to finance to expand their business. Further, EBRD’s support of businesses in
rural parts of Romania demonstrates the Bank’s commitment to the development
of this sector and is a continuation of EBRD’s strong and productive
cooperation with local investors, Ms Kuno added.
Banca Transilvania began its operations in 1993 with its headquarters in the
north-west town of Cluj-Napoca. Today Banca Transilvania is the largest
private locally-owned Romanian bank, with 394 branches across the country, and
it was the first bank to be listed on the Bucharest Stock Exchange in 1997.
Shareholders are the EBRD, Romanian Financial Investment Companies -
Banat-Crisana and Oltenia and many other investors with smaller stakes.
* The EBRD, EU and the Romanian government launched a new €88 million Romania
Micro Credit Facility Framework in 2006 with the aim of providing non-bank
microfinance institutions and commercial banks servicing the MSE sector with
necessary funding and technical assistance to expand their lending to the
smallest and micro enterprises in Romania as well as lending to start-up micro
entrepreneurs.
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