The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has announced its first investments in Mobiasbanca, one of the leading commercial banks in Moldova serving more than 50,000 customers, including small and medium enterprises and retail and corporate clients.

IFC will provide a US$7mn financing package to the bank consisting of a US$5mn loan for on-lending to small and medium businesses and a US$2mn trade finance guarantee facility under IFC’s Global Trade Finance Program.

IFC’s loan will help Moldova’s fifth-largest bank increase its volume of financial services to small and medium enterprises, which often lack access to long-term funding. Mobiasbanca is the first bank in Moldova to join the IFC trade programme, which provides guarantee coverage of bank risk in emerging markets.

Martin Kimmig, IFC’s manager, field and portfolio for Southern Europe and Central Asia Region, Global Financial Markets Department, says: “IFC’s loan will help strengthen Moldova’s banking sector by supporting a bank that has a good track record of providing a range of loan-based and fee-based products to corporate and retail clients. Just as important, making trade financing more widely available to Mobiasbanca and its clients underscores IFC’s commitment to supporting Moldova’s international and interregional trade activities.”

Nicolae Dorin, the chairman of the administrative board of Mobiasbanca adds, “We are delighted to establish this strategic partnership with IFC and look forward to furthering it in the future. Cooperation with IFC will allow us to considerably broaden the access of our clients to long-term financing – up to six years – and thus satisfy the permanently growing investment appetite of Moldovan enterprises.”

Dorin adds, “The Global Trade Finance Program will enlarge the bank’s opportunities to issue documentary instruments confirmed with the world leading banks for the term up to 18 months. So, by expanding our base of international partners Mobiasbanca continues to improve the quality and availability of the bank services to its clients”.

Shahbaz Mavaddat, IFC’s acting director for Southern Europe and Central Asia, comments, “IFC’s investment and the trade finance guarantee will directly support the sustainable growth of smaller businesses in Moldova. This is in line with IFC’s strategy to assist Moldovan banks that focus on lending to small and medium enterprises, which are key drivers for private sector development and employment generation.”

IFC’s Global Trade Finance Program provides risk mitigation for trade and trade-related transactions involving banks in the emerging markets. Using IFC guarantees, participating banks can expand the volume and tenor of trade finance transactions within an extensive network of correspondent banks. Since the Global Trade Finance Program launched in September 2005, IFC has issued more than US$100mn in trade guarantees for more than100 transactions.