EBRD provides first Rural Facility in Romania

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May 2007
London, United Kingdom, May, 24 2007 - Through its first rural facility in Romania, the EBRD is lending Casa de Economii si Consemnatiuni SA (CEC), the oldest commercial bank in Romania, €10 million to promote private-sector growth in rural areas, including the development of micro, small and medium-sized enterprises lending across the country.

The funding for the Romanian savings bank, which comes under the rural sub-window of the EU/EBRD SME Finance Facility, will be used to finance loans to farms and small enterprises for amounts of up to €125,000 in rural areas of Romania. The loan will be complemented by up to €1.5 million from the European Commission, including a technical assistance package to support CEC’s small business lending operation.

CEC will use the EBRD loan to strengthen its funding base to extend loans to private businesses registered across Romania in cities not larger than 50,000 inhabitants. By doing so, SMEs will have more access to finance to expand their businesses.

Hildegard Gacek, EBRD Director for Romania, said this loan is the first rural financing arranged by the EBRD in Romania. Channelling the financing through CEC which has such a strong regional presence and rural coverage will have a wide impact in helping local enterprises become more competitive through improved access to financing, said Ms Gacek.

Donato Chiarini, Head of the Delegation of the European Commission to Romania, said that the facility will help Romania’s rural private businesses and will contribute to the growth of a fully developed market economy across the territory. The Commission will continue to support such initiatives in Romania, said Mr. Chiarini.

Established in 1864, CEC reaches out to a broad variety of clients throughout Romania, ranging from Romanian individuals, to entrepreneurs, SMEs and larger corporate companies. CEC is amongst the largest commercial banks of Romania, with a new strategy dedicated to SMEs.

Romania’s accession to the EU has brought new challenges for the Romanian banking sector, said Radu Gratian Ghetea, President of CEC. The bank has developed a very fruitful co-operation with the EBRD over the last years and our strategy is to further build on this. The technical assistance provided by the EU under the EU/EBD SME Facility has been instrumental in know-how transfer to our employees in areas like credit analysis, marketing and sales, as well as credit scoring. This loan will consolidate our position in the SME lending sector with a distinct focus on clients registered in the rural areas of Romania to make better use of our extended branch network with the widest rural coverage within the Romanian banking sector, said Mr Ghetea.

The EU/EBRD SME Finance Facility, a joint programme of the European Commission and the EBRD, supports the development and growth of entrepreneurs by facilitating their access to finance. Under this regional project covering 11 countries, EBRD has committed €1,111.5 million to date since the launch of the Facility in 1999, supported by EC grant funding from the Phare programme of €148.3 million.

The Phare programme is the main channel for the EU’s financial and technical cooperation with accession countries. For further information, see: http://europa.eu.int/comm/enlargement.

The EBRD is one of the largest investors in Romania, having committed more than €3.47 billion in over 194 projects.



 

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