The access to financing is the biggest problem faced by entrepreneurs in the Republic of Moldova, said the director of the Organization for Entrepreneurship Development (ODA) Dumitru Pîntea. According to him, the Government helps the entrepreneurs to raise investment loans through the agency of the 373 program. The program offers the beneficiaries cheaper loans, with a grace period of up to three years. Since the program was launched, 20 entrepreneurs have taken out preferential loans from commercial banks, IPN reports.
The ODA chief noted that most of the entrepreneurs in Moldova say the impossibility of raising loans with advantageous rates is an impediment to developing businesses. In this connection, the Government launched the 373 program that became accessible on June 1.
“Our entrepreneurs in time invoked the problem of access to financing. The access to financing has always been regarded as a major constraint to business development. The money has always been expensive in the Republic of Moldova. Respectively, it is hard to pay interest rates of 10% when you have a small profit. On the other hand, there is the problem of collateral. You need to pledge something with the banks in order to access financial resources. The long-term financing was the third impediment. When you want to develop a business and have an investment project, a large amount of money is needed. The banks do not usually provide long-term financing, for ten years. This year the Government, through the agency of ODA, comes with instruments that can solve these problems,” Dumitru Pîntea stated in the program “Public Space” on Radio Moldova station.
To benefit from advantageous loans within the 373 program, the entrepreneurs need to present an eligible investment plan to the bank and have an own contribution of 10% for the investment program. The 373 program subsidizes loans of up to 15 million lei or the equivalent in foreign currencies for a maximum period of seven years.
“As regards the collateral, the ODA manages the Loan Guarantee Fund, which was considerably capitalized with the support of the World Bank. This can guarantee a significant loan portfolio. The guarantees issued by the ODA can represent up to 80% of the value of the guaranteed loan. Another problem is that the loans are expensive. Here, the Government intervened through the 373 program that comes to reduce the interest-related costs. In the case of euro, the interest is 3%. In the case of lei, the interest is 7% and the maximum grace period is three years. The entrepreneurs will pay an interest rate of 3% in euro and of 7% in lei. What is beyond this ceiling will be compensated by the state. Such financing conditions haven’t existed earlier in the Republic of Moldova. These are the best conditions for accessing investment loans. So far, 20 entrepreneurs raised loans through the agency of the 373 program,” said the ODA director.
Under the regulations of the 373 program, each investment project is assessed based on the innovation degree, economic potential, sustainability and green impact. A loan is released when at least 60% of the criteria stipulated in the program are met.
