EBRD and OTP Bank Moldova Launch €30 Million Financing Boost for Moldovan MSMEs, Focusing on Agriculture and Trade
(IN BRIEF) The European Bank for Reconstruction and Development (EBRD) has introduced a pioneering risk-sharing facility in Moldova with OTP Bank, enabling €30 million in new financing aimed at supporting the country’s MSMEs, particularly in agriculture and trade. This EU-backed facility covers up to 50% of OTP Bank’s credit risk, helping the bank channel additional funds to Moldova’s business sector, which is vital to the economy. The initiative aligns with EBRD’s ongoing commitment to foster economic resilience in Moldova, where MSMEs form the majority of businesses.
(PRESS RELEASE) LONDON, 5-Nov-2024 — /EuropaWire/ — The European Bank for Reconstruction and Development (EBRD) has introduced its first unfunded portfolio risk-sharing facility in Moldova through an agreement with OTP Bank. This new arrangement aims to unlock €30 million in financing for Moldovan businesses, especially micro, small, and medium-sized enterprises (MSMEs), with a strong emphasis on the agricultural and trade sectors. This facility, a first for Moldova, builds on the EBRD’s success with similar instruments in Ukraine, Albania, and Bosnia and Herzegovina.
Under this agreement, the EBRD will guarantee up to 50% of the credit risk on loans that OTP Bank extends to Moldovan MSMEs. These small businesses are a backbone of the local economy, making up 98% of all companies and employing 60% of Moldova’s workforce. Support from the European Union, via the European Fund for Sustainable Development Plus (EFSD+), offers first-loss risk coverage, helping to drive sustainable investment in Moldova.
This risk-sharing arrangement strengthens OTP Bank’s capacity to increase lending, allowing it to better serve local businesses by leveraging its own funds for new loans. This facility also reflects EBRD’s commitment to diversifying its offerings in Moldova, supporting a partner bank with which it has maintained a partnership since 1996.
At the signing event in Chisinau, Catarina Bjorlin Hansen, EBRD’s Head of Office for Moldova, highlighted the facility’s potential to bridge funding gaps for MSMEs, allowing financial institutions to mobilize liquidity for critical business segments. Bogdan Spuza, OTP Bank’s CEO, noted the facility’s role in driving economic growth in Moldova, adding that OTP Bank aims to enhance sustainable finance practices with the EFSD+ support.
OTP Bank is one of Moldova’s key banks and has been instrumental in initiatives spanning from trade finance to energy efficiency. The EBRD, Moldova’s largest institutional investor, has invested nearly €2.5 billion in 177 projects across the country, continuing to back its economic resilience and growth. The official launch of this innovative product will take place next week in Chisinau.
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Publish date : 2024-11-05 00:22:00
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