Private Sector Credit Project

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The Private Sector Credit Project aims to improve access to finance by the private sector, expected to prod banks' capacity for small, and medium scale enterprise lending, including the management of associated credit risks, to further stimulate exports, manufacturing responsiveness, and related services. The project comprises two main components: 1) provision of a credit line to support private enterprise finance, extended through participating private banks. The eligibility criteria for businesses, stipulates the average percentage of private equity required, active manufacturing capacity, and a required maintenance of debt-to-equity ratio, and debt service coverage ratio. The eligibility criteria of subprojects is determined by the readiness to finance at least twenty five percent of the subproject's cost, based on a business plan, balance sheet, income statement, and cash-flow projections. A subsidiary finance to participating financial intermediaries (PFIs) will be extended, based on specific sub-loan conditionality (investment loans, working capital, interest rate, extension terms and service charges) denominated in Euro currency, where borrowing enterprises will assume currency risks, interest rate, and currency risks will be limited, while credit risk will be assumed by the PFIs, and, 2) technical assistance will be extended, also in euro currency, conditional to an eligibility criteria on a case-by-case basis, on maturity periods, and on interest rate arrangements.