The EBRD is providing much-needed support to small businesses experiencing difficulties in Romania. New EBRD funding for Romania’s Banca Transilvania will allow continued lending to SMEs at a time when credit has tightened.
Small businesses in Romania are feeling the pinch, caught between cash-strapped buyers and more cautious banks. In 2008 borrowing by Romania’s small and medium-sized enterprises (SMEs) fell after commercial banks withdrew their long-term debt financing. The global financial crisis forced many small businesses to shelve expansion plans and even cut jobs. But Banca Transilvania continued to do what it does best: lending to small businesses.
This was possible thanks to a €100 million loan from the EBRD. Over 7,500 of Banca Transilvania’s SME clients stand to benefit.
Established in 1993 by 40 local entrepreneurs, Banca Transilvania is now the largest private locally owned bank in Romania with more than 1.3 million clients, of which 125,000 are small businesses ranging from farmers to food distributors.
The EBRD owns 15 per cent of Banca Transilvania and is its largest shareholder. Since 2002 the EBRD has supported the bank’s activities by lending just over €90 million in equity and debt to finance SME credit lines, mortgages, syndicated loans, an energy efficiency facility and, recently, a rural financing facility.