IFC, a member of the World Bank Group, is providing a RON 70 million loan to Agricover Credit IFN to increase access to finance for farmers in Romania and support the country’s agribusiness sector.
Agricover Credit IFN, part of Romania’s Agricover group, is the only financial institution in Romania aimed exclusively at agriculture financing. The new loan will support Agricover Credit’s financing for agribusiness SMEs to increase their working capital and would also contribute to expand the company’s portfolio, while deepening its market penetration.
This is the second loan IFC has provided to Agricover Credit IFN. In 2012, IFC provided a EUR 12.5 million loan to the company, also to increase access to finance for farmers. Agricover Credit offers both short-term working capital financing and medium-term investment loans to farmers who actively grow agricultural crops, and / or operate in animal breeding, milk production and the agro-processing sector.
“This new agreement allows us to further support the development of small and medium-sized farmers by improving their access to the funding they need to increase their productivity and generate added value, both for their own businesses and for the sector,” said Robert Rekkers, CEO of Agricover Credit IFN.
“We have the necessary resources and plan to provide more affordable financing to this target segment,” added Rekkers.
Romania has the second-largest amount of arable land of a country in Europe and its agriculture sector employs around 35 percent of the country’s workforce. IFC continues to support the agribusiness sector given its potential for development, especially its strong role in reducing poverty.
“We are working with Agricover Credit IFN to ensure that even small farmers have access to finance,” said Manuel Reyes-Retana, IFC Regional head for Financial Institutions Group in Europe, Middle East and North Africa.
“By deepening our reach beyond traditional banking institutions, we strengthen the capacity of alternative financiers to meet the capital needs of key underbanked sectors like agribusiness,” added Reyes-Retana.
IFC’s long-term strategy in Romania’s financial sector is to scale up the ability of banks and non-banking financial institutions to provide loans to underserved sectors, such as agribusiness, microbusinesses and SMEs, and to promote financial products to include trade finance lines and local currency financing.