Starting today, young people between the ages of 16 and 26 can access a state credit of up to RON 40,000 plus RON 20,000 if they are employed or in search of employment, while adults aged 26 to 55 can receive a credit of RON 35,000 plus RON 20,000 under the same conditions, with zero state-subsidized interest, as part of a program called ”Investeste in Tine” (Invest in Yourself).
The program aims to facilitate access to financing for those who want to develop themselves personally and professionally, by investing in education, culture or health. For this year, the total ceiling of government guarantees that can be issued is RON 600 million.
Beneficiaries must meet the following eligibility criteria:
- individuals with Romanian citizenship domiciled in Romania;
- young people between the age of 16 and up to 26 years old not fulfilled at the time of requesting the credit inclusive and enrolled in the education system or to undertake specialization courses authorized by the Ministry of Education or, as the case may be, the Ministry of Labor;
- persons aged between 26 and 55 not fulfilled at the time of applying for the credit, including if they are enrolled in the education system or carry out retraining and/or professional training courses authorized by the Ministry of Education or Labor;
- have at least one codebitor if the applicant is not employed.
The draft normative act has the following characteristics: the guarantee percentage of the loans granted by the Program is 80 percent, excluding interest and related commissions; the maximum amount of state-guaranteed funding is RON 40,000, for beneficiaries aged between 16 and 26 years, respectively RON 35,000, for beneficiaries aged between 26 and 55 years.
The credits may be supplemented by RON 20,000 for all beneficiaries if they are employed or engage in the course of the loan; the state guarantee is granted through the National Loan Guarantee Fund for Small and Medium Enterprises (FNGCIMM) and the Romanian Counter-Guarantee Fund (FRC).
Bank interest rates, commissions and fees for guaranteed loans are covered by the National Commission for Strategy and Prognosis (CNP) budget; the maximum credit duration is 10 years.
The program also provides for the obligation of the lending credit institutions to ensure a grace period at least equal to the study period, no more than 5 years from the date of granting the credit.
The total ceiling of state guarantees that can be issued for 2018 is RON 600 million and the total budget of interest subsidies and commissions is RON 5 million, borne from the state budget through the budget of the CNP.
The total cost of the credits granted under the Program, which is borne by the state budget, consists of:
- ROBOR interest rate at 3 months plus a margin of maximum 2% per year;
- the margin includes all the costs associated with granting and running the credit at all stages of the funding;
- funding analysis fee, up to 0.1 percent applied to the amount of funding;
- the State guarantee management fee charged by FNGC.I.M.M. and F.R.C.
Amounts earned through accessing credits can be used to settle eligible costs, such as pay for specialization / qualification / vocational training, postgraduate studies (master, doctorate, MBA, etc.) at educational establishments Romania, payments for the purchase of books, stationery, specialized magazines, fees for participation in scientific events and competitions in Romania, transportation costs for participation in scientific events in Romania or abroad.
The purchase of computers, laptops, printers, software, rentals, utilities, accommodation in school dormitories or students is also eligible. Also eligible are payments such as kindergarten, nursery or private school fees in Romania, cultural subscriptions to cinema, theater, opera, library, museums, book publishing costs or specialized studies, expenditure on tools and equipment for cultural services.
Also, the Invest in Yourself program can cover health care costs such as the cost of medicines, medical analyzes, dental services or surgical interventions that are not covered by the Single National Health Insurance Fund or national public health programs.
Another part of the expenditure eligible for the program is the expenditure on personal sports equipment and subscriptions to sports activities (fitness, swimming, etc.). The “Invest In Yourself” credit can also be used to finance part of the construction or purchase of a home, and for the modernization or renovation of the dwelling.