The EBRD is lending Raiffeisen Bank Romania (RBRO) E10mn to help meet the growing demand among local entrepreneurs for finance to build, modernise or expand their existing businesses.
Raiffeisen Bank, the Romanian subsidiary of Austria’s RZB Group, will use the funds to make loans of up to E250,000 to local entrepreneurs. Maturities on these small business loans can reach up to 10 years, well beyond tenors currently available in the local market.
Hildegard Gacek, EBRD director for Romania, said this loan will help overcome a major stumbling block affecting Romania’s small and medium-sized enterprises. The shortage of long-term finance available through local commercial means is restricting the growth of this important sector. Through credit lines the EBRD is working with partners like Raiffeisen Bank to address this issue. The loan should also act as a demonstration and catalyst for other local banks to provide longer-term financing, says Gacek, which would ultimately benefit them, their clients and the overall economy.
Rasvan Radu, RBRO vice-president for the retail division adds: “The EBRD financing facility has more flexible conditions for SMEs compared to other existing financing sources. It is very useful and it will contribute to the growth of this segment. This new agreement continues an already established cooperation between our institutions and proves our commitment to support the development of this sector in Romania.”
The loan is being provided in conjunction with a European Investment Fund guarantee facility to support small and medium enterprises (SMEs) in the European Union accession countries. The guarantee, which is offered under the EU Multi-Annual Programme for SMEs, encourages banks to expand their finance for entrepreneurs by enhancing their risk-taking capacity.
Raiffeisen Bank Romania was established in 2002 following the merger between two RZB entities acting in the local market, namely Raiffeisenbank (Romania), established in 1998 as a subsidiary of the RZB Group and the former state-owned Banca Agricola, acquired by RZB in July 2001. RBRO is a top universal bank in the Romanian market, providing a complete range of high quality products and services to more than 1.2 million customers, including individuals, SMEs and corporations, via multiple distribution channels, ranging from 196 banking outlets throughout the country to ATMs, phone-banking and mobile-banking.