Investment & Fund Management
European Investment Fund Partner
Full Credential Description
The SME Initiative in Romania, launched in October 2016, aimed to address the significant financing challenges faced by small and medium enterprises (SMEs) in the country. Romanian SMEs often struggled with access to finance, which hindered their ability to innovate, grow, and create jobs. To tackle this issue, the initiative was designed to provide a 60% guarantee on loans issued by participating banks, thereby reducing the risk for lenders and enabling them to offer loans at lower interest rates.
Five major banks in Romania—Raiffeisen Bank, ProCredit Bank Romania, Banca Comerciala Romana, Banca Transilvania, and BancPost—signed agreements to participate in the SME Initiative. This collaboration was expected to benefit approximately 3,700 SMEs and start-ups in need of financial support. The initiative combined European Structural and Investment Funds (ESI Funds) with resources from the EU's Horizon 2020 Programme and the EIB Group, creating a risk-sharing mechanism that would leverage commercial lending.
As a result of this initiative, Romanian SMEs gained access to financing on more favorable terms, which included reduced interest rates and improved collateral requirements. This financial instrument was anticipated to act as a catalyst for private investment, ultimately fostering job creation within the SME sector. The EIF Deputy Chief Executive highlighted the impressive uptake of the initiative, emphasizing its potential to finance a significant number of Romanian SMEs in the coming years. The initiative not only aimed to enhance the competitiveness of Romanian businesses but also served as a model for other EU member states to follow in increasing the use of ESI Funds through financial instruments.