Five Romanian banks to lend 540 mln euro to SMEs under EU initiative

June 22 (SeeNews) - Five Romanian banks have signed up to the Small and Medium enterprises (SMEs) Initiative in Romania led by the European Investment Bank (EIB), the European Investment Fund (EIF) and the European Commission that is expected to provide about 540 million euro ($601 million) in new financing.

The agreements with the five banks aim to facilitate access to finance for Romanian SMEs by providing a 60% guarantee on each loan and by lowering the interest rates charged by banks, the EIB said in a press release on Wednesday.

These transactions with Raiffeisen Bank, ProCredit Bank Romania, Banca Comerciala Romana, Banca Transilvania and BancPost are expected to benefit around 3,700 SMEs and start-ups in need of finance.

Romania will contribute with 100 million euro from its European Structural and Investment Funds (ESI) to the EU's SME initiative, which will be leveraged with commercial lending through a risk-sharing mechanism, the EIB added.

"These five banks are significant SME lenders in Romania and via the SME Initiative will be crucial partners in providing support for entrepreneurs," EIB vice-president, Andrew McDowell said.

The SME Initiative entails an innovative change in the use of European Structural and Investment Funds (ESI Funds), combining the latter with EU central budget and EIB Group funds.

"I am pleased to see that Romanian businesses are fully tapping into the potential of the SME initiative. Romanian entrepreneurs are talented and Romanian small businesses are competitive, but they often need an additional boost in order to develop innovative products, enter global value chains and create jobs in the country," European commissioner for regional policy Corina Cretu said.

The SME Initiative Programme for Romania, adopted in October, is part of a broader initiative of the European Commission and the EIB Group.

The SME Initiative is a joint financial instrument of the European Commission and the EIB Group. It was designed as a fast and effective response instrument to increase lending to the real economy, create jobs and stimulate growth.

($=0.8978 euro)