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EBRD credit line and equity investment for Moldovan leading private bank
The leading private sector bank in Moldova will receive a US$ 4.0 million (ECU 3.3 million) credit line and a US$ 0.25 million (ECU 0.2 million) equity investment from the European Bank for Reconstruction and Development (EBRD). The two financings, going to Victoria Bank (VB), a Joint Stock Corporation incorporated in Moldova, were signed in London today by Josue Tanaka, Director of the Moldova/Romania/Croatia Team of the EBRD and Victor Turcan, Chairman of VB.
At the signing, Mr Tanaka commented: “This first project to the Moldovan banking sector is instrumental in promoting the development of a market oriented economy by supporting the growth of a private sector financial institution, and strengthening its competitive position. It also provides needed long-term funds for private sector enterprises, including the promotion of Moldovan exports in hard currency”.
The two-tranche loan of US$ 1 million and US$ 3 million respectively, will support VB’s foreign exchange lending operations, including term loans, working capital and trade finance. It will be extended for sub-loans to private sector enterprises and to state-owned companies which are independently managed and on their way to private ownership and control.
The US$ 0.25 million equity investment, representing 20 per cent of VB’s share capital, will improve the bank’s balance sheet and will give the flexibility to introduce new longer term products. It will also allow the prudent expansion of local currency lending to credit-worthy borrowers with strong prospects in domestic markets in parallel with loans created with the EBRD’s loan.
VB started operations in 1989 and became a joint stock company in September 1991. It has 272 shareholders comprising purely private companies. With a client base of 3,500 private and state-owned companies and individuals, VB hopes to become a full-service diversified commercial bank offering a full-range of banking products and services to its clients.
The project includes a technical cooperation programme and is expected to have an important indirect impact on employment creation by supporting increased economic activity of existing among new private entrepreneurs.
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