May 26 (SeeNews) - The International Finance Corporation (IFC) is lending 70 million lei ($17.2 million/15.3 million euro) to Romanian non-banking financial institution Agricover Credit IFN in order to increase access to finance for local farmers.
The loan will support Agricover Credit’s financing for agribusiness small and medium sized enterprises (SMEs) to increase their working capital and would also contribute to expand the company’s portfolio, while deepening its market penetration, the IFC said in a press release on Thursday.
This is the second loan IFC has provided to Agricover Credit with the aim of increasing access to finance for farmers. In 2012, IFC extended a 12.5 million euro ($14 million) loan to the company for the purpose.
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"This new agreement allows us to further support the development of small and medium-sized farmers by improving their access to the funding they need to increase their productivity and generate added value, both for their own businesses and for the sector," Agricover Credit CEO, Robert Rekkers, said.
Romania has the second-largest amount of arable land of any country in Europe and its agriculture sector employs some 35% of the country’s workforce, the IFC noted.
"By deepening our reach beyond traditional banking institutions, we strengthen the capacity of alternative financiers to meet the capital needs of key underbanked sectors like agribusiness," said Manuel Reyes-Retana, IFC regional head for financial institutions group in Europe, Middle East and North Africa.
IFC also said that its long-term strategy in Romania’s financial sector is to scale up the ability of banks and non-banking financial institutions to provide loans to underserved sectors, such as agribusiness, microbusinesses and SMEs, and to promote financial products to include trade finance lines and local currency financing.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. During fiscal year 2016-2017, its long-term investments in developing countries rose to nearly $19 billion.
Agricover IFN is the financing division of Agricover Holding, which was founded in 2000 through the merger of Comcereal Buzau and Ulvex Buzau. It offers both short-term working capital financing and medium-term investment loans to farmers who actively grow agricultural crops, and / or operate in animal breeding, milk production and the agro-processing sector.
(1 euro =4.5573 Romanian lei)