The EBRD, under its Moldovan Microlending Programme (MMP), is providing technical assistance to selected local private banks to develop and enhance lending skills for micro and small loans.
The programme will focus on training loan officers, development and introduction of specialised lending products for micro and small businesses, implementing satisfactory monitoring tools and procedures, including internal auditing, loan monitoring for high turnover micro portfolios and developing analytical techniques for assessing problem loans.
The experts under the programme will provide support to local banks in establishing dedicated MSE lending departments, selecting and training loan officers and supervising the lending activities.
MMP intends to cover as many regions of Moldova as possible but will, as minimum, operate in at least five regions (including Chisinau) by the end of the two-year assignment.
Until now the micro-finance market in Moldova has been mainly serviced by non-bank financial institutions. However the potential for MSE lending in Moldova is large, with small businesses representing nearly 90% of the total number of enterprises in the country and more active involvement of commercial banks will improve credit access for micro and small businesses as well as boost competition.
The programme funding for €1.3mn has been provided by the ETC Multi Donor Fund under early transition countries (ETC) initiative which aims to provide increasing support to smaller private sector projects in the bank’s seven lowest-income countries of operations.
Each of the participating banks will also contribute substantial staff and management resources. The programme will be carried out by Business and Finance Consulting Company, which has an international team of experts with significant experience in microfinance in Europe and CIS.
To be included in the programme the banks have to meet EBRD’s required standards transparency of ownership, corporate governance and financial soundness and have to be fully dedicated to development of microfinance. MMP has already started working with two Moldovan banks, Mobiasbanca and Banca Sociala, which are existing partner banks of the EBRD and meet EBRD’s required standards. MMP will be open to additional banks subject to their ability to meet EBRD’s eligibility criteria.
The EBRD is the largest investor in Moldova with almost €206mn in 43 projects across the country. The country is part of the EBRD’s early transition countries initiative, designed to address the needs of the poorest countries in which the bank operates.