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EBRD, Albania’s Union Bank sign 30 mln euro risk-sharing agreement

EBRD, Albania’s Union Bank sign 30 mln euro risk-sharing agreement Photo: EBRD

TIRANA (Albania), November 7 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Thursday that it has signed a 30 million euro (33.2 million) agreement with Albania's Union Bank to risk-share lending to local businesses.

EBRD will be able to risk-share Union Bank’s corporate and small and medium-sized enterprise (SME) loan exposures, it said in a statement.

“Through the risk-sharing framework, the EBRD offers partner banks funded or unfunded risk-participation schemes in US dollars, euros or local currency, under which the EBRD will take part of the risk of sub-loans extended by partner banks to eligible clients,” the lender added.

The agreement will support Union Bank's strategy to achieve sustainable growth and allow it to lend more to SMEs, both meeting the higher financing needs of its selected clients and keeping its risk-weighted assets under control, the EBRD said.

“Local banks’ ability to support the growth of successful SMEs, which are the backbone of economies across the Western Balkans region, is often constrained by single-borrower exposure limits imposed by central banks or by their own internal guidelines that aim to manage loan portfolio concentration,” the EBRD noted.

Union Bank is the third bank in Albania to join the EBRD’s Risk Sharing Framework.

($ = 0.90276 euro)