The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will lend around €40mn to Finansbank Romania to enhance its ability to lend to Romania’s small and medium enterprises. These businesses traditionally have difficulty accessing long-term funds.

IFC’s financing for Finansbank includes a seven-year loan of €20mn and an additional tranche in Romanian currency. Finansbank is the Romanian subsidiary of the Turkish Fiba Group.

Shahbaz Mavaddat, IFC’s director for Southern Europe and Central Asia, says, “Improving small and medium enterprises “access to finance through an innovative private commercial bank is particularly important now, to help prepare this segment of Romania’s economy for competition within the European Union.” Romania will join the EU at the beginning of 2007.

Mavaddat adds, “IFC’s support also contributes to further economic integration in Southeast Europe by assisting Turkey’s FIBA Group in its regional expansion.”

IFC has agreed with Finansbank that the loans financed by IFC may only go to small and medium enterprises that comply with certain social and environmental standards. This excludes the financing of certain types of business, such as production of weapons.

“Our financing aims to encourage improvements of sustainable business practices by making the prudent management of social and environmental issues mandatory for Finansbank clients,” says Jyrki Koskelo, director of IFC’s financial markets department.

Finansbank’s general manager, Tamer Ozatakul, adds, “The loan agreement is part of an extended financing programme to support our bank’s growth and implement development projects. Finansbank Romania, by winning IFC’s trust, has proved to be a prudent and reliable financial partner in Romania.”

Omer Tetik, vice-president of Finansbank, comments, “This financing by a multilateral financial institution will help us offer longer-term financing to our clients. The local currency tranche of the loan is also a clear indication of the growing confidence of foreign investors in Romania’s currency and the country’s economic performance in the long term.”