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EBRD provides first Factor Finance project across region
Facility to help promote private-sector growth in Romania
In its first factor finance project across its 29 countries of operations, the
EBRD is lending Compania de Factoring (CdF), the first factoring company in
Romania, €6.5 million to promote private-sector growth, including the
development of small and medium-sized enterprises and retail lending across
the country.
Factoring is a process whereby financial intermediaries such as CdF buy
receivables such as outstanding debt or other monetary obligations from
companies. CdF will use the EBRD loan, being provided in Romanian Lei and
Euro, to strengthen its funding base to buy receivables from private
businesses. By doing so, SMEs and retailers will have more access to finance
to expand their businesses. The project is part of the EBRD´s Trade
Facilitation Programme, which supports the development of international trade
and domestic and international factoring.
Kurt Geiger, EBRD Business Group Director for Financial Institutions, said
this loan is the first financing arranged by the Bank for a factoring company
across its 29 countries of operation. In Romania this will have a wide impact
in helping local enterprises become more competitive through more access to
financing, and the novelty of the loan is reflected in the interest
international investors are taking, said Mr Geiger.
Established in 2006, CdF reaches many clients across all segments of society
throughout Romania, ranging from corporate companies to SMEs. The company is
50/50% owned by Intermarket Bank, Austria (an A rated bank and well known
international factor) and Banca Transilvania, Romania.
Romania’s accession to the EU has brought new challenges for the Romanian
non-banking financial entities, said Valentin Chirca, CEO of CdF. This is the
first international financing organised for CdF by an international financial
institution and will be followed by other similar transactions. This loan will
consolidate our leadership position in the nascent Romanian private factoring
sector, said Mr Chirca.
The EBRD is the largest investor in Romania, having committed more than € 3.47
billion in over 192 projects.
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