EU support for SMEs in Romania: EIF and Libra Internet Bank sign agreements to benefit businesses

The European Investment Fund (EIF) and Libra Internet Bank have signed the first loan guarantee agreement in Romania under the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) and extended their microfinance cooperation under Progress Microfinance with funding from the European Union.

The COSME agreement will provide Libra Internet with a guarantee allowing the organisation to increase its lending volumes over the next 3 years, by providing loans to SMEs with significantly reduced collateral requirements. The EU support is expected to leverage a portfolio of EUR 53m to the benefit of over 1,650 companies.

The Progress Microfinance EUR 2.5m loan agreement will allow Libra Internet Bank to provide enhanced access to finance to micro-entrepreneurs, in particular to self-employed young and rural entrepreneurs in Romania, many of whom face difficulties in accessing credit from traditional banking sources. Progress Microfinance and COSME are funded by the European Commission and managed by the European Investment Fund.

Speaking at the signature ceremony in Bucharest, EIF Microfinance Manager, Cristina Dumitrescu said: “I am delighted to be announcing the first COSME guarantee agreement in Romania and an additional Progress Microfinance agreement with Libra Internet Bank. I am confident that these new agreements will build on the successful cooperation following our microfinance agreements last year, to benefit many more Romanian businesses lacking the sufficient collateral to access financing”.

European Commission Head of Unit for COSME Financial Instruments, Ciprian Cristea said: "The European Commission is firmly committed to helping EU SMEs succeed. Today's agreement with Libra Bank will help improving Romanian SMEs access to credit, stimulating the economy from the foundation up."

LIB General Manager, Emil Bituleanu said: "We are glad to announce that LIB is the first bank in Romania who signed COSME loan guarantee programme to support SMEs sector for the next 3 years. Also, we are glad that we have disbursed in less than 10 months over 380 micro-loans amounting to ROL 30 million under the European Progress Microfinance Facility. We are delighted to extend this agreement for the coming years.”

Businesses wishing to apply for loans can directly contact Libra Internet Bank’s branches in Romania.                                    

About the EIF

The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over EUR 8.8 billion at end 2014. With investments in over 500 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF’s guarantees loan portfolio totalled over EUR 5.6 billion in over 350 operations at end 2014, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

About Libra Internet Bank

Libra Internet Bank is a Romanian legal person, regulated by the Romanian law and the supervisory norms of the National Bank of Romania.

Libra Internet Bank has a network of 40 national branches and is addressed mainly to customers in the SMEs segment, Corporate, Professionals and Agriculture. At the end of 2014 had a market share of 0.47% and it is ranked 24^th out of 40 banks in Romania.

SMEs wishing to apply for finance under the COSME programme can directly contact Libra Internet Bank on the following website: www.librabank.ro/fondurieropene

About COSME

COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020. With a total budget of EUR 2.3bn, COSME mobilises loans and equity investments to SMEs in Europe. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. This facility also includes securitisation of SME debt finance portfolios. The COSME programme also invests through the COSME Equity Facility for Growth in equity funds that provide risk capital to SMEs mainly in the expansion and growth stages. The COSME programme builds on the success of the Competitiveness and Innovation Framework Programme (CIP) (2007-2013) which helped to mobilise more than EUR 18 bn of loans and EUR 3 bn of venture capital to over 350,000 SMEs in Europe.

Businesses can contact selected financial institutions in their country to access EU financing: www.access2finance.eu 

About the European Progress Microfinance Facility

The European Progress Microfinance Facility (Progress Microfinance) provides guarantees and funded instruments to microfinance intermediaries. The initiative is established with EUR 205 million of funding from the European Commission and the European Investment Bank. Progress Microfinance aims to increase access to finance for micro-entrepreneurs, including the self-employed. It has a particular focus on, but is not restricted to, groups with limited access to the conventional credit market. Examples include female entrepreneurs, young entrepreneurs, entrepreneurs belonging to a minority group, entrepreneurs with a disability, sole traders etc. Loans less than EUR 25,000 are made available through selected intermediaries participating in the facility. Progress Microfinance does not provide direct financing to micro-entrepreneurs or individuals.

Libra Internet Bank marks the 77th transaction signed under Progress Microfinance since its inception in 2010. To date, commitments of EUR 164 million under Progress Microfinance have been signed to benefit micro-borrowers. Progress Microfinance agreements have been signed to date with financial intermediaries in 21 EU-Member States including Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, France, Greece, Hungary, Ireland, Italy, Lithuania, Poland, Portugal, Romania, Slovenia, Slovakia, Spain, Sweden, The Netherlands and the UK.

For further information about this initiative please visit: www.ec.europa.eu/epmf

Press contact:

EIF: David Yormesor, tel: +352 42 66 88 346, e-mail: d.yormesor@eif.org

Libra Internet Bank: Mihaela Duica, mihaela.duica@librabank.ro, +40 742 174 607