First credit line in Moldova to support free trade with EU

By Olga Rosca
@olgarosca

First credit line in Moldova to support free trade with EU

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EBRD, EU and Mobiasbanca help small businesses to improve products and services

The EBRD, the European Union (EU) and Mobiasbanca - Groupe Société Générale are launching today the first credit line in Moldova that will enable small and medium-sized enterprises (SMEs) to take advantage of opportunities under the Deep and Comprehensive Free Trade Area (DCFTA) with the EU.  

This project will support the integration of the Moldovan economy into European markets. The EBRD’s new transition concept argues that a well-functioning market economy should be integrated, competitive, inclusive, well-governed, green and resilient.

The EU4Business-EBRD Credit Line aims to help local SMEs invest in improvements to their product quality and modernisation of their services to meet EU standards.

The EBRD announced the €10 million loan to Mobiasbanca - Groupe Société Générale in late 2016. Under its EU4Business initiative, the EU is supporting the credit line through investment incentives for eligible SMEs and by funding free technical advice from local and international experts.

Dimitri Gvindadze, Head of the EBRD office in Chisinau, said: “A successful private sector is a cornerstone of the economic development of Moldova and the EBRD is keen to continue its support for businesses with this new credit line. The credit line, and the valuable support from the EU, will help to improve product standards and services so that businesses can seize new market opportunities offered by the DCFTA with the EU. This is to everyone’s benefit: Moldova’s private sector companies, local and European consumers, and the Moldovan population as a whole, all stand to gain from increased regional trade and investment integration, which can foster economic growth and employment.”

EU Ambassador to Moldova Pirkka Tapiola, commented: "Together with our partners from the EBRD we help you implement much needed reforms and capitalise to the maximum on the opportunities for economic success for the Republic of Moldova that DCFTA offers. We are together to ensure that these reforms bring changes to people's lives, through concrete support provided for business development in the country."

Elena Guzun, Commercial Director of Corporate Banking at Mobiasbanca, added: “Mobiasbanca’s strategy is to provide SMEs with accessible and advantageous financing products and the expertise to develop modern businesses. For this reason, we develop partnerships with European financial institutions focused on attracting international funds in the most favourable financing conditions for our clients, including grant components and support to strengthen the development capacity and competitiveness of SMEs.  We believe that this effort contributes directly to the development of small and medium-sized businesses, which will help to boost the country’s economic growth.”

Moldova’s Association Agreement with the EU entered into force in 2016 and it fosters the implementation of important reforms. The establishment of the free trade area with the European Union creates new trade and investment opportunities as it offers businesses access to the EU’s single market – the largest in the world.

The EU4Business-EBRD Credit Line is part of a comprehensive package of activities that will help businesses make most of their new market access. The EBRD and the EU also support Moldova’s firms through direct lending, expert advice for SMEs on how to grow their businesses and policy dialogue aimed at improving the investment climate.

The loan to Mobiasbanca - Groupe Société Générale is part of a larger programme which consists of €380 million in EBRD loans and trade guarantees to local banks for on-lending to businesses in Moldova, Georgia and Ukraine, while the EU is making available €19 million for technical assistance, investment incentives and risk-sharing.

The EBRD is the largest institutional investor in Moldova. Since the start of its operations in the country, the Bank has invested over €1.1 billion in more than 110 projects in Moldova’s financial, agribusiness, energy, infrastructure and manufacturing sectors.