Five Romanian banks have signed up to the SME Initiative in Romania, to provide new financing for Small and Medium enterprises (SMEs) across the country. The SME Initiative is managed by the EIB Group (European Investment Bank and European Investment Fund), the Government of Romania and the European Commission.
This initiative will generate EUR 540 millon in fresh funding for companies in Romania.
The agreements with the five banks aim to facilitate access to finance for Romanian SMEs by providing a 60 percent guarantee on each loan and by lowering the interest rates charged by banks. These transactions with Raiffeisen Bank, ProCredit Bank Romania, Banca Comerciala Romana, Banca Transilvania and BancPost are expected to benefit around 3,700 SMEs and start-ups in need of finance.
The SME Initiative brings an innovative change in the use of European Structural and Investment Funds (ESI Funds), combining the latter with EU central budget (resources from the Horizon 2020 Programme) and EIB Group funds.
Romania is contributing EUR 100 million from its European Regional Development Fund envelope to this EU initiative, which, together with resources from the EIB Group and the Horizon 2020 programme, will be leveraged with commercial lending through a risk-sharing mechanism. This will result in more SMEs benefiting from European resources on advantageous terms, such as reduced interest rates and improved collateral requirements.
EIF deputy chief executive, Roger Havenith said: “The uptake of the Romanian SME Initiative has been impressive, and I am pleased that five SME Initiative agreements have now been signed. These transactions will help to finance more than 3,700 Romanian SMEs over the coming years. The combination of European Structural and Investment funds, EU Horizon 2020 and EIB Group resources allows EIF to provide risk-sharing and capital relief to financial intermediaries for the ultimate benefit of local SMEs.”
The European commissioner for Regional policy Corina Cretu added that “Romanian entrepreneurs are talented and Romanian small businesses are competitive, but they often need an additional boost in order to develop innovative products, enter global value chains and create jobs in the country.”