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Loan will support the financing of local small and medium-sized enterprises
Chisinau, Moldova, October 25, 2001
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed an agreement to provide a US$1.5 million credit line to a leading Moldovan bank to help finance loans to small and medium-sized enterprises (SMEs). The loan follows an earlier IFC $1.5 million credit line to the same bank, Moldindconbank SA, which has used the funds to distribute loans to fifteen SMEs in Moldova.
This second credit line – coming ten months after the first one in January 2001 – will further support the development of Moldova’s SME sector, which suffers from a lack of available financing for investment and working capital. The investment fits in with IFC’s global strategy of strengthening local financial institutions that support SMEs.
“A strong and vibrant SME sector fuels economic growth and creates sustainable jobs,” said Khosrow Zamani, Director of IFC’s Southern Europe and Central Asia Department. “We are committed to supporting the strengthening of Moldova’s SME sector and the financial institutions that provide the much-needed finance to fuel their growth. We are pleased to further develop our strong relationship with Moldinconbank SA to provide affordable long-term funding to local SMEs,” he added.
Mrs. Ana Gheorghiu, the President of the Managing Board of Moldindconbank SA, said “the disbursement of the second $1.5 million credit line is very welcome at a time when the industrial sector has resumed a positive growth trend and therefore needs additional investments to ensure continuous economic growth in the country.”
The IFC investment is coupled with a $747,000 donor-funded program of technical assistance to three Moldovan banks including Moldindconbank. The Netherlands’ Ministry of Foreign Affairs through the IFC Technical Assistance Trust
Fund Program provided the
donor support to transform the banks into effective intermediaries to channel credit to the SME sector.
Moldindconbank SA is ranked among the first five banks in Moldova for the size of its assets and capital. Today, on the eve of its 10th anniversary, the bank is widely recognized for its quality of service. Since its foundation, the bank has focused on supporting Moldova's private sector.
IFC has played an active role in Moldova since the country became a member in 1995. Since then, IFC has approved approximately $84 million in financing for seven investments in power, telecommunications, agribusiness, and the financial sector, as well as technical assistance projects in banking, tourism, wineries, food processing, and leather industries.
IFC's mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC's committed portfolio at the end of FY01 was $14.3 billion.
