press release 22 May 2006

EBRD Works With Moldovan Bank To Boost MSEs

Mobiasbanca receives $3 million credit line to support local micro and small enterprises.

The European Bank for Reconstruction and Development is extending a $3 million credit line to Moldova’s Mobiasbanca to support its lending to local micro and small enterprises (MSEs).

Mobiasbanca will be the first Partner Bank (PB) to receive funds under EBRD’s Moldovan Microfinance Framework (MMF), a $25 million facility. MMF provides funds to eligible local commercial banks for on-lending to MSEs.

Mobiasbanca is the fifth largest private bank in Moldova. Established in 1990 it now has seven branches in Chisinau, six outside the capital and 42 outlets throughout the country. The credit line provides an opportunity for this dynamic bank to expand further into the microfinance segment in Chisinau and the rural areas.

The facility enables the EBRD to reach out to more creditworthy local small businesses and to promote entrepreneurial activities throughout the country. Sub-loans between $100 and $100,000 will be on-lent by Mobiasbanca to existing and new small business clients so they can set up new business or expand existing activities.

MMF is also supported by technical assistance valued at €1.3 million from the ETC Multi Donor Fund to strengthen the Partner Bank’s MSE operations, establishing the most efficient MSE lending procedures and designing new credit products for the sector. It will also help participating banks to develop the necessary skills and capacity to undertake MSE lending safely and profitably.

The potential market for MSE lending in Moldova is huge, says Francis Delaey, head of the EBRD office in Moldova. Small businesses represent nearly 90% of the total number of enterprises in the country. The Credit Line extended to Mobiasbanca will improve access of these enterprises to loans and will promote competition in the banking market.

Serghei Cartasov, First Vice Chairman of the Board of Mobiasbanca said: “We greatly appreciate EBRD’s cooperation in supporting Mobiasbanca’s strategic priority of expanding into the micro-lending sector”.

The EBRD’s ETC Initiative, launched in 2004, aims to stimulate market activity in the Bank’s lowest- income countries of operations by using a streamlined approach to financing more and smaller projects, mobilising more investment, and encouraging economic reform. The initiative is part of an international effort to address poverty. The Bank will accept higher risk in the projects it finances in the ETCs, while still respecting the principles of sound banking.

EBRD has supported over one million small enterprises throughout Eastern Europe, Russia, Central Asia and the Caucasus through its MSE programmes. EBRD has worked with over 84 commercial banks and non-bank microfinance institutions to establish or expand specialised micro and small business finance units and has lent €560 million to facilitate close to €8 billion in loans to micro and small businesses in the region.

The EBRD is the largest foreign investor in Moldova with almost €201 million in 44 projects across the country.

Press contact:

Loretta Martikian, London - Tel: +44 20 7338 7805; E-mail: martikil@ebrd.com

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