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Moldovan business gets more access to finance
EBRD $6 million facility to Mobiasbanca to help meet growing demand
Mobiasbanca SA, a private bank in Moldova, will benefit from an innovative
EBRD risk-sharing facility that will help meet local entrepreneurs’ growing
demands for longer-term finance. The $6 million facility is being provided
under the Bank’s Early Transition Countries (ETC) initiative, which helps
boost entrepreneurship and growth in the poorer countries of the CIS.
Besides enabling Mobiasbanca to on-lend longer-term finance to successful
medium-sized businesses, a novel element of the facility is the ability of the
EBRD to directly co-finance projects with the bank, sharing the ultimate
client risk. As a result, Mobiasbanca will be able to propose larger sub-loans
to its clients than it would on a stand-alone basis: up to $2 million, with a
maximum maturity of five years.
In countries like Moldova, credit is constrained by the size of the banking
system, single-borrower exposure limits and lack of medium- and long-term
funds. Francis Delaey, head of the EBRD’s Chisinau Resident Office, said the
new facility is designed to overcome these obstacles and increase support to
the private sector.
By working with the best local banks, he added, the EBRD plays a crucial role
by allowing them to target clients whose needs are outgrowing the capacity of
the local banking system. Entrepreneurs need finance to acquire, expand or
modernise, as well as address working capital needs, including export and
pre-export financing, Mr Delaey added.
The EBRD has a long-standing existing relationship with Mobiasbanca, the
sixth-largest private bank in Moldova, which is majority-owned by foreign
investors and specialises in supporting small and medium-sized enterprises.
The two institutions have been cooperating since 1997 on micro-lending, trade
facilitation and SME financing.
Nicolae Dorin, Chairman of the Administrative Council of Mobiasbanca, said
this project represents the bank’s good and continuing cooperation with the
EBRD. He added: “Medium-sized business is fundamental for the Moldovan economy
and is a key sector for Mobiasbanca. This EBRD facility will help Mobiasbanca
provide larger loans for medium-sized companies, and as we approach our 15th
anniversary, we are committed more than ever to further supporting local
private businesses through various banking instruments.”
The EBRD is the largest single investor in Moldova having committed more than
€174 million in 35 projects, and as outlined in its Moldova strategy, remains
committed to helping private sector growth.
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