The European Bank for Reconstruction and Development (EBRD) has partnered with two Moldovan banks, Maib and OTP Bank, to unlock €70mn in finance for small businesses in the country.

The €70mn package consists of two unfunded risk-sharing facilities: a €40mn agreement with Maib, signed this week, and a €30mn with OTP Bank, signed last week. The guarantees cover up to 50% of each bank’s credit risk on financing to micro, small and medium enterprises (MSMEs), which make up 98% of all businesses in Moldova and employ 60% of its workforce.

While the EBRD did not provide specific details on how the funds will be used, it tells GTR that the trade and agricultural sectors are likely to be the main focus for both banks.

The facilities are supported by the European Fund for Sustainable Development Plus (EFSD+), the financing arm of the European Union’s emerging market infrastructure initiative, Global Gateway.

“The EFSD+ guarantee agreement on financial inclusion is also an important part of the EU4Business Initiative[an umbrella initiative that includes all EU support to SMEs in select non-EU European countries],” says Adam Grodzicki, deputy head of cooperation, delegation of the European Union to the Republic of Moldova.

“By integrating three pillars of action – access to finance, business development services and a business enabling environment – the initiative is supporting Moldova in its path towards building a sustainable and inclusive market economy, in which SMEs are the main driver for innovation and job creation.”

The EBRD’s agreements build on the successful deployment of similar SME-focused facilities in other non-EU countries, including Bosnia and Herzegovina, Ukraine and Albania. It also continues the development bank’s longstanding investment in Moldova, where it has invested nearly €2.5bn to date.