A new loan guarantee instrument has become available, called portfolio guarantees. The mechanism is financed through the World Bank’s MSME Competitiveness Project.
According to Dumitru Pântea, director of the Entrepreneurship Development Organization (ODA), the loan portfolio guarantee mechanism is an innovative initiative for Moldova and beneficial both for the local financial system and for borrowers. The result expected from this mechanism is the guarantee of a loan portfolio of approximately two billion lei. This will facilitate access to finance for at least 900 businesses and help keep or create at least 3,000 jobs. The advantage of portfolio guarantees is in their ability to cover multiple loans under one umbrella, thus providing greater flexibility and efficiency for both lenders and businesses, and the financing process becomes easier and faster.
Attending the event, Minister of Economic Development and Digitalization Dumitru Alaiba emphasized that the Loan Guarantee Fund is an instrument with enormous potential for stimulating the growth of the national economy and a key factor in supporting local businesses and entrepreneurial initiatives. Through the guarantees granted, it will contribute to reducing the risk associated with lending and, implicitly, to facilitating access to financing for entrepreneurs.
Octavian Armașu, Governor of the National Bank, mentioned that the NBM has recognized the individual financial guarantees issued by the Loan Guarantee Fund as mitigating the credit risk. “The Moldovan economy is going through a complicated period. The effects of the war in Ukraine are being felt and against this background the economy is struggling to recover from the shocks of the previous years. It needs support through monetary and fiscal policies, and entrepreneurs need the support and encouragement of the authorities, with ODA playing an essential role especially regarding small and medium-sized enterprises”, added the NBM governor.
Carolina Odobescu, Senior Operations Officer, World Bank, said that Moldova still has a long way to go to reap the benefits of an entrepreneurial culture. The World Bank’s Enterprise Study shows that only 8% of Moldovan firms are sole proprietorships, compared to 17% in the region and 40% globally. Public assistance is needed to encourage would-be entrepreneurs to create new businesses and generate jobs. ODA is a strong institution in this regard for promoting an entrepreneurial culture in multiple ways.
