UPDATE: BCR and Raiffeisen to lend EUR 315 million for SMEs through JEREMIE initiative

UPDATE: Steven van Groningen, CEO of Raiffeisen Bank – institution which will receive through JEREMIE initiative some EUR 100 million – announced that there are two major advantages of this type of credit.

One is linked to a lower interest rate. “This kind of credit could be even lower with 4 percent than the ones currently available in the national currency,” said the Raiffeisen Bank official.

The other major advantage refers to collaterals SMEs have to present to banks. “There will be cases when we will not demand at all collaterals, but also cases when we will ask them, as the bank and the client have to share the risk,” said van Groningen.

According to him, the loans will be available both in RON and EUR, in some three weeks. “We expect to OK about 1,000 loans through this program.”

Also, Banca Comerciala Romana (BCR) will have at its disposal about EUR 212.5 million.

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“About 20 percent of this sum will go to finance micro enterprises, other 20 percent for new start-ups and the rest of 60 percent for longer term business development projects,” said Dominic Bruynseels, CEO BCR.

Currently, Romania counts about 50,000 insolvent SMEs. 

The European Investment Fund (EIF) has signed two guarantee agreements with Banca Comerciala Romana and Raiffeisen Bank under the Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative, allowing the two banks to provide up to EUR 315 million of new loans to Romanian small and medium enterprises.

Following the two agreements, BCR and Raiffeisen Bank will offer financing at preferential conditions to a broad range of SMEs across Romania looking to invest or expand their business. Within a timeframe of two years, Romanian SMEs will be to access JEREMIE finance with maturities of up to six years.

Banca Comerciala Romana (BCR) and Raiffeisen Bank will provide further information on the products available for SMEs under this agreement and how to access loans guaranteed through the JEREMIE initiative.

The First Loss Portfolio Guarantee (“FLPG”) instrument, signed by the EIF and the two banks under the JEREMIE initiative, provides an adequate risk sharing balance for the two financial intermediaries, further allowing them to supply additional finance to SMEs in Romania.

The two agreements result from a ‘call for expression of interest’ launched in 2010, which attracted a high level of interest from local financial intermediaries operating in Romania. In order to select the best of the 9 applicants, EIF checked and thoroughly assessed the expressions of interest received, using the EIF’s expertise built up through providing guarantees to financial institutions across Europe over the past 15 years.

JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (Directorate General Regional Policy) and the European Investment Bank Group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007 – 2013. JEREMIE enables the EU Member States and Regions to put money from the structural funds and also national resources into holding funds that can finance SMEs in a flexible and innovative way. The new initiative aims at developing and fostering the role of entrepreneurship within the EU. 

At the level of the European Union, the EIF has currently signed eight national and three regional Holding Fund agreements. 

, Dana Verdes