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Leasing gains ground in Romania
€5 million EBRD loan to BT Leasing Transilvania will support local entrepreneurs
The EBRD is lending BT Leasing Transilvania SA (BTL), a subsidiary of Romania’s Banca Transilvania, $5 million to enable more entrepreneurs to acquire goods by leasing. Improving the lease financing market across the country is a critical ingredient in Romania’s continuing transition towards a market economy.
The loan, which is being guaranteed by Alpha Bank Romania (ABR), will be complemented with more than €700,000 in technical assistance and other financing from the European Union to help further train credit officers in lease financing. These funds are part of the Leasing Window of the EU/EBRD SME Finance Facility, a programme of the European Union in cooperation with the EBRD to promote SME growth and development across those countries expected to join the EU. The EBRD has committed €700 million to the overall facility, of which €495 million has been disbursed by local banks and leasing companies via some 19,000 loans and leases.
BTL will use the loan to finance micro and small enterprises with leases not exceeding €30,000 and €125,000, respectively, and will be specific to SMEs for the leasing of equipment and commercial vehicles.
Jonathan Woollett, Director of Non-Bank Financial Institutions at the EBRD, said the loan will provide additional financing to the SME sector for the purchase of equipment. The leasing sector in Romania is growing, responding to the financing needs of companies. It is therefore important that leasing companies have sufficient financing to meet this demand.
The EC has committed €130 million to the SME Facility in grant financing and for technical assistance since the facility’s launch in 1999. Jonathan Scheele, Head of the Delegation of the European Commission to Romania, said that the EU is a strong supporter of SMEs in Romania because these businesses will help build its economy. Lease financing is slowly taking off in Romania, and we will continue to support its growth, he added.
Titus Nicoara, General Director of BTL, said the cooperation with the EBRD and EU will allow BTL to become a key player in the Romanian leasing market.
This loan builds on the success of three previous EBRD loans to Banca Transilvania in 1999, 2002 and earlier this year, which have helped finance more than 525 SMEs across the country. Banca Transilvania began its operations in 1994 with headquarters in the north-west town of Cluj-Napoca, and today has 60 branches across the country. Robert Rekkers, CEO of Banca Transilvania, said that leasing activities have been and will continue to be a key strategic orientation of Banca Transilvania. Sergiu Oprescu, Vice-President of Alpha Bank Romania, added that their guarantee was a signal of ABR’s full commitment towards the development of the SMEs, and reconfirms ARB’s deep understanding of the leasing market in Romania.
The SME Facility was launched under the Phare Programme - the main channel for the EU's financial and technical cooperation with the EU accession countries - with the EBRD, to encourage the growth and development of SMEs by providing access to loans, leasing and equity finance from local financial intermediaries. The budget earmarked for the Phare Programme from 2000-2006 is about €1.5 billion a year.
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