GMFI - Microenterprise Credit Romania

completed

MFR''s strategy is to become a market leader in micro and small business finance in Romania by building on its competitive advantages in the credit market. MCR currently has a small loan portfolio of US$2.0 million. MFR will diversify its product range and geographical reach in 2001 and 2002, especially in Transylvania and the Romanian border regions. Following approval of its Global Microfinance Facility in 2000, IFC has moved rapidly to invest in new microfinance institutions in Europe, Latin America and East Asia, and to strengthen relationships with its strategic partners in the for-profit microfinance field -- EBRD, DOEN Foundation, KfW, FMO and IMI. MFR was one of the sub-projects approved within the Global Facility. IFC has played an important role in creation and support of strategic alliances with partners to develop the for-profit microfinance industry in the Balkan Region (MEB Bosnia, MEB Yugoslavia, Pro Credit Bulgaria, FEFAD Albania) and has catalyzed private sector involvement for the proposed investment in MFR.Microfinance schemes have shown a major positive impact in alleviating poverty and unemployment in emerging markets worldwide, and -- in recognition of this strong developmental impact -- almost all multilateral and bilateral institutions and donor agencies are actively promoting microfinance schemes. Similarly, the proposed investment in MFR is expected to be strongly developmental -- in terms of its economic impacts, stimulus for business reconstruction, employment generation, confidence-building in the banking sector, and introduction of commercially-oriented microfinance techniques to Romania. MFR is expected to have a significant demonstration effect through introduction of best practice commercial banking techniques and professional credit analysis in Romania.