April 17 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday that together with the EU it is providing 10 million euro ($11.31 billion) in new financing for Moldova-Agroindbank (MAIB) and Victoriabank, following steps by Moldova’s key lenders to achieve transparency of ownership and to restore corporate governance.
"We welcome Moldova’s progress in the banking sector. As corporate governance and ownership transparency has been restored in MAIB and Victoriabank, we have now resumed lending to these key local lenders in order to expand access to finance for Moldovan businesses," EBRD’s Financial Institutions Director for Western Balkans, Belarus, Moldova and Ukraine, Henry Russell, said.
The loans worth 5 million euro each are provided through the EU4Business-EBRD credit line and are accompanied by EU grant-based funding which is part of the EU4Business initiative, the bank said in a press release.
The funds are available for investments to improve both production processes and product quality of Moldovan businesses and to strengthen their potential to succeed on the EU market. Exporters can use the funds to make investments that aim to achieve EU standards in the areas of environmental protection, health and safety and product quality and safety.
The EBRD financing to Victoriabank and MAIB follows a turn-around in corporate governance of the two lenders. In October 2018, the EBRD and two equity firms, Horizon and Invalda, acquired a majority stake in MAIB. Also in 2018, Romanian lender Banca Transilvania took ownership control of Victoriabank where the EBRD holds a minority stake.
With financing from the EU4Business-EBRD credit line, which is also available in Moldova, Georgia and Ukraine, the EBRD and the EU are supporting efforts by companies to become more competitive and to trade more successfully on the EU market.
"Access to finance from EU4Business funds opens up new opportunities for Moldova Agroindbank to support the national economy, in particular SMEs. I am fully confident that with loans issued by MAIB from EU4Business resources, local SMEs will improve the quality of their goods and services, thus ensuring their access to the EU market," MAIB Chairman of the Executive Committee Serghei Cebotari said.
With the fresh financing, the programme in Moldova has provided a total of 55 million euro in loans to five partner banks and 8.25 million euro in EU grants which help expand the range of financing opportunities for local companies.
"With this all important loan, Victoriabank will be able to diversify its credit products by providing customers with access to grant funding and technical advice and also tailor its lending both to SMEs and also larger firms," Victoriabank CEO Bogdan Plesuvescu said.
($= 0.8843 euro)
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