OREANDA-NEWS. August 28, 2007. Small and medium-sized enterprises in Moldova will benefit from a new ?5 million credit line the EBRD is extending to Banca Sociala, reported the press-centre of EBRD.

The proceeds of the loan will be on-lent to private and independent companies with less than 250 employees, a maximum annual turnover of ?7 million and a balance sheet of maximum ?5 million. Sub-loans under the credit line will typically not exceed ?500,000.

Small and medium-sized enterprises (SMEs) constitute the backbone of Moldova’s economy: More than 90 percent of all enterprises fall into this category and employ almost 60 percent of the active labour force. Yet access to finance and especially medium and long term financing remains limited.

Therefore, the EBRD in its strategy for Moldova decided, inter alia, to put special emphasis on “the provision of additional SME credit lines”. Banca Sociala, on the other hand, regards increasing its market share in this sector as key for further growth and expansion in an increasingly competitive business environment.

Banca Sociala has been a long standing partner of the EBRD in the area of SME and micro lending. This is EBRD’s third loan to Banca Sociala, which is also an active participant in the EBRD’s Trade Facilitation Programme.

Jean-Marc Peterschmitt, Director for Bank Relationships in the Financial Institutions Group of the EBRD, said the new loan provides the EBRD with the opportunity to support the expansion of one of the largest and most successful private banks in Moldova which also has an excellent track record in corporate governance. The credit line will also help meet local entrepreneurs’ growing demand for long term financing and stimulate and support economic activity in Moldova.

Vladimir Suetnov, President of Banca Sociala, said that the development of the Moldovan private SME sector is a strategic goal of Banca Sociala. “The cooperation with the EBRD is a cornerstone in this strategy. Although the cooperation started only two years ago, already remarkable results have been achieved and the outlook is very promising”, Suetnov said.

To-date the EBRD has signed 29 projects in Moldova worth more than ?75 million, for which additional funds were mobilised from its partners. The country is part of the EBRD’s Early Transition Countries Initiative which aims to stimulate the economy in the Bank’s lowest-income countries by using a streamlined approach to financing more and smaller projects, mobilising more investment, and encouraging reform.