Romanian SMEs face ‘dire’ lending conditions, warns PM

Romanian PM Victor Ponta said that banks have put in place strict lending conditions for SMEs but are swiftly acting in foreclosing them, warning the government cannot help the small companies because the state-owned banks are too small.

PM Ponta stated that Romanian SMEs face a “dire situation” when attempting to take out a bank loan.

“This is a problem specific for Romania, the fact that we don’t have a large Romanian bank, Eximbank sustains the exports as much as it can. The CEC (e.n. state-owned bank), I am waiting to see it’s a Romanian bank that supports small companies in Romania. I wouldn’t like to CEC to be a bank just like the others,” said the PM, on Thursday, during an event of Romanian SMEs.

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“Banks have turned into real estate agencies, in agencies selling cars and your assets,” said the PM. He added the winder issue in Europe is that banks finance real estate booms and securities, instead of providing loans to successful businesses.

According to Ponta, the government has secured cheaper financing on the international markets, due to the precautionary loans with international lenders, leaving the “national liquidity” for SMEs.

He added that Romania comes last in the EU with an absorption rate of 21 percent, behind Bulgaria which absorbed 30 percent of the allotted EU funds.

“In think that Romania’s biggest tragedy in the last seven years, the worst thing that we’ve gone through during the crisis, the fact that last year, six years after EU accession we had absorbed only 7 percent of the EUR 20 billion, which was a disaster,” commented Ponta.

The PM said that Treasury funds were used to pay the beneficiaries of EU money, until the European Commission reimbursed the funds in programs that had been presuspended by EU authorities due to fraud allegations.

Ovidiu Posirca