European Bank for Reconstruction and Development (EBRD) and European Fund for Southeast Europe (EFSE) are boosting the availability of financing to private businesses with a loan to ProCredit Bank in Moldova for lending to micro and small enterprises (MSEs).
The $10m loan extended to ProCredit Bank will help the institution diversify its funding base and maintain the provision of credits to small enterprises in the current difficult conditions. To help ProCredit Bank and its customers mitigate risks associated with lending in foreign currencies, half of the credit line is offered in Moldovan lei equivalent.
The proceeds of the five-year credit line will be used to finance investments and working capital of local small businesses with medium-term loans. Syndicated under the EBRD’s A/B structure, ProCredit Bank is retaining $5m on its own account, with the remaining $5m co-financed by the EFSE.
Henry Russell, director of small business finance and energy efficiency, said: “Supporting the growth of the private sector in Moldova is one of EBRD’s priorities. Through this transaction the EBRD is reinforcing its commitment to helping local entrepreneurs develop their businesses by providing much-needed financing, particularly in the current challenging environment.”
Elvira Lefting, CIO of EFSE, said: “The loan EBRD and EFSE are providing in this syndicated structure is an important signal that small business lending can and will resume in Moldova. A part of the funding will be offered in Moldovan Leu, which will allow ProCredit Bank to provide its customers with long term local currency funds in line with the principles of responsible finance they have subscribed to.”
Ilinca Rosetti, GM of ProCredit Bank in Moldova, said: “This loan contributes to the continuous fulfilment of the ProCredit’s strategic mission in Moldova: supporting local entrepreneurs and the overall development of the Moldovan economy. In the current environment entrepreneurs need access to longer term loans even more than before, in order to develop further their businesses, helping the country recover after the financial crisis.”
ProCredit Bank is the successor of the financial company ProCredit in Moldova that provides loans to small businesses.