Moldova Microlending Framework

complete

The proposed project will provide on-lending funds to leading Moldovan banks and non-bank microfinance institutions which will enable EBRD to further expand outreach to creditworthy MSEs throughout the country. Credit lines to commercial banks will be accompanied by an intensive technical assistance programme which will ensure that they develop the necessary skills and capacity to undertake MSE lending profitably. The proposed project will enable the Bank to increase financial intermediation by expanding and deepening outreach as well as facilitate competition through strengthening domestic banks committed to this sector. Competition will result in downward pressure on interest rates thus benefiting MSE borrowers. Additional transition impact will be the transfer of skills and know-how to loan officers as the four PB will benefit from TC. The proposed project will initially be implemented in four local commercial banks. USD 25 million “Moldova Microlending Framework” in the form senior loans to local commercial banks for on-lending to micro and small enterprises (MSEs). USD 25,000,000 (EUR 20,621,958.26) TC of EUR 1.3 million has been provided by the ETC Multi Donor Fund (approved by TC Com on 05 July 2005) All partner banks will adhere to the Bank’s Environmental Procedures for Micro and Small Loans and apply them to all sub-loans financed under this Facility. Sub-loans will be required to comply, at a minimum, with national health, safety and environmental legislation and standards. Each PB will provide EBRD with Annual Environmental Reports. TC funding has been provided by the ETC Multi Donor Fund for EUR 1.3 million and this will provide the necessary resources for two years of assistance to the four selected partner banks. Each of the partner banks will also contribute substantial staff resources, management resource and office facilities. Consultants have been selected under EBRD’s standard procedures and the Bank is currently engaged in contract negotiations: consultants are expected to commence the TC programme in February 2006. Sabina Dziurman, e-mail: dziurmans@ebrd.com