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Victoriabank SA, a private bank in Moldova, is the first to receive a loan under a new €
60mn EBRD co-financing facility that aims to meet the growing demands of medium-sized business entrepreneurs in some of the poorest countries in eastern Europe, including Moldova.

The loan will enable Victoriabank to provide owners of successful, private businesses in Moldova with more and longer-term access to finance to support, among other things, the acquisition, expansion or modernisation of their existing businesses. It will also address their working capital needs, including export and pre-export financing.

George Krivicky, director of the Early Transition Countries Initiative at the EBRD, says there is a clear gap in the market where successful medium-sized business entrepreneurs are inhibited by a lack of access to sufficient amounts of finance. In countries like Moldova, credit is constrained by the relatively small size of the banking system, single-borrower exposure limits and lack of medium-and long-term funds. The EBRD’s new facility is designed to overcome these obstacles by working with the best local banks to boost this dynamic segment of the private sector, which plays a crucial role in the transition process, Krivicky adds.

Under the facility, the EBRD will provide a credit line to Victoriabank, from which private businesses will be eligible to draw loans of around US$1mn-2mn. The credit risk on individual sub-loans will be divided equally between the EBRD and Victoriabank.

Established in 1990, Victoriabank, the country’s first private bank, has grown to become one of its largest in terms of assets, deposits and lending activities. The EBRD has worked with Victoriabank since 1995, providing around €
16mn in investments that include acquiring a 15% stake in the bank, providing credit lines to support micro, small and, medium-sized enterprises, and promoting trade activities.

The EBRD is the largest single investor in Moldova, with more than €
170mn invested in 29 projects.