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EBRD and EC boost funding for Romanian rural businesses
Finance to Banca Transilvania to help promote private sector growth in rural areas
The European Bank for Reconstruction and Development, jointly with the European Union under the Phare* programme, is continuing to support the growth of micro, small and medium-sized enterprises (MSMEs) in rural parts of Romania with a new €10 million loan for Banca Transilvania (BT), the largest and fastest growing locally-owned Romanian bank. The line is complemented by €1.3 million grant support from the EC for technical assistance and incentives.
The EBRD is providing the rural facility under the EC/EBRD Rural SME Finance Facility*. The facility will finance the development of small businesses in rural areas with up to 30,000 inhabitants. The loan will also promote private entrepreneurship by providing better access to medium and long-term funding. The credit line will be distributed through at least 50 of Banca Transilvania’s branches and agencies across the country with the main purpose of reaching as many new clients as possible.
This project builds on the success of previous equity investments and loans to Banca Transilvania since 1999, which have helped finance over €53m of SME and corporate loans across the country.
Ambassador Donato Chiarini, Head of the Representation of the European Commission to Romania, said that this second facility will enhance the support for Romania’s rural private businesses. Also, it will help the growth of specific areas of Romania with a positive impact on its full integration in the joint market of the EU. The Commission has and will continue to support such initiatives in Romania, Mr Chiarini said.
Jean-Marc Peterschmitt, EBRD’s Director for Bank Relationships, said supporting BT with its extensive branch network will help to make a substantial contribution to the underserved SME sector in the rural parts of Romania and the development of financial services in the country. EBRD’s support for small, private 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,” Mr Peterschmitt said.
Robert C. Rekkers, BT’s General Manager, said that the bank has developed a very fruitful co-operation with the EBRD over the last years and our strategy is to further build on this. This loan will consolidate our position in the SME lending sector with a distinct focus on clients registered in the rural areas of Romania to make better use of our extended branch network with wide coverage across Romania, said Mr Rekkers.
Banca Transilvania began its operations in 1994 with its headquarters in the north-west town of Cluj-Napoca. Today BT is the largest private locally-owned Romanian bank, with 418 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 (SIFs) - Moldova, Banat-Crisana and Oltenia and many other investors with smaller stakes.
* The EU/EBRD SME Finance Facility, a joint programme of the European Commission and the EBRD, supports the development and growth of entrepreneurs by facilitating their access to finance. Under this regional project covering 11 countries, EBRD has committed over €1,136.5 million to date since the launch of the facility in 1999, supported by EC grant funding from the Phare programme of €148.3 million. The Phare programme is the main channel for the EU’s financial and technical cooperation with accession countries. For further information, see: http://europa.eu.int/comm/enlargement.
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