The EBRD has granted a EUR 10 million loan equivalent to Patria Credit IFN S.A. for on-lending to micro and small enterprises (MSEs). Out of the total loan, EUR 3 million will be extended in Romanian RON, reflecting the EBRD’s focus on increasing local currency lending in its countries of operations.
The loan is extended under the EU Romania Microcredit Facility and co-financed with funds from the EU and the Romanian government.
The EBRD loan will address the limited access to finance for Romanian entrepreneurs in Romania, especially in remote and rural areas. It will support Patria Credit in expanding its lending portfolio and will increase the availability of finance to MSEs.
The project is complemented by technical assistance funds provided by the EU and Romanian government as part of the RMCF, which have been earmarked to support further strengthening of Patria Credit and to develop loan products for agribusiness and rural activities.
Patria Credit is operating since 1996 and is one of the most important financial intermediaries for low-income micro and small borrowers in Romania, servicing over 9,000 clients.
“The provision of local currency funding will enable Patria Credit to increase its lending in leu, reducing the foreign exchange risk for its clients and decreasing their vulnerability to global macroeconomic fluctuations. Easier access to formal financial sector finance for MSEs will further encourage the development of private sector in Romania’s rural areas,” said Henry Russell, Director of the Small Business Finance team of the EBRD.
“The support received by Patria Credit from the EBRD through the RMCF will allow the company to continue with its strategic plans to develop its network in urban and rural areas in order to facilitate the access to finance of Romanian microentrepreneurs and agricultural producers in a commercially sustainable way. The evolution of Patria Credit business in 2010, when disbursements almost tripled versus 2009, proved that these segments of the market are more and more approaching lending for covering their financing needs”, said Horia Manda, the Chairman of the Board of Directors of Patria Credit.
Patria Credit is a non-bank financial institution, controlled by the Romanian American Enterprise Fund and the Balkan Accession Fund, which provides lending to micro and small entrepreneurs and to agricultural producers. By year-end 2010 it will reach total assets of over EUR 40 million and a network of 39 branches.