The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are providing new finance to small and medium-sized enterprises (SMEs) in Moldova. A €17.5 million loan to Moldova Agroindbank (MAIB) will offer much-needed access to finance to this critical business segment, IPN reports.
The funds are part of the EU4Business-EBRD credit line and will help companies to invest in modern production equipment and technologies to meet EU standards in terms of product quality, health and safety measures and environmental preservation. Following these investments, companies will be able to offer high-quality products on the local market and benefit from trade opportunities with the European market.
The loan is the third provided to MAIB for on-lending to support businesses across the country and increase their competiveness. The joint EBRD-EU support comes at a critical time for firms in Moldova, which have been hit hard by the economic impact of the coronavirus pandemic.
A loan within the Bank’s Loan for Investment Purposes service will be repayable in a minimum of 36 months and a maximum of 72 months. This type of financing is provided in attractive conditions and includes a grant component of 10% – 15% of the loan that is released when the project is implemented and can be used for different purposes. There is also a grace period and flexibility for different investment needs, MAIB has said in a press release.
“We are committed to helping businesses to invest in modern production, especially in the currently challenging climate,” said Angela Sax, EBRD Head of Moldova. “There are clear benefits to such investments in the short and medium term. We work closely with our financial and institutional partners to provide tangible support that will result in increased trade through higher standards and boost economic recovery across the country.”
“Access to finance is an essential element for SMEs to be able to overcome the current crisis and make use of their growth potential after the pandemic. The EU has been providing support to the SME sector in the Republic of Moldova for many years. Currently we have approximately 20 bilateral and regional projects helping Moldovan entrepreneurs through the provision of grants, loans and business advisory services. The EU-funded projects also aim to improve the business climate and ensure a level playing field for SMEs,” added EU Ambassador to the Republic of Moldova Peter Michalko.
“Now that the business environment is facing difficulties caused by the ongoing pandemic and climate issues, MAIB keeps on backing entrepreneurs, confidently supporting their business plans. The new loan is further proof that the EBRD, the EU and MAIB are combining efforts to strengthen Moldovan SMEs so that they can improve their production quality and conquer the European market. The partnership with the EBRD and the EU’s support allow us to help Moldovan businesses under preferential conditions,” said MAIB CEO Serghei Cebotari.
Last April, MAIB signed the first cooperation agreement with the EBRD under the EU4Business-EBRD credit line, obtaining access to a €5 million loan. Last December, there was signed the second agreement to the value €7.5 million. The sums were fully used by the customers of MAIB from the SME sector and over 50% of the customers also used the EU’s grant component under the EU4Business-EBRD credit line.