Republic of Moldova to receive funds for small and medium businesses
The EBRD (European Bank for Reconstruction and Development), along with two other entities, recently offered a credit for business activities in the Republic of Moldova.
This is the first credit line in Moldova that EBRD, along with the European Union (EU) and Mobiasbanca – Groupe Société Générale, has offered to the Eastern-European nation. By doing this, Moldova will be able to finance its small- to medium-sized businesses. It will also help the former socialist nation to integrate its economy into the European Market.
In total, the three European entities will offer Moldova 10 million EUR. Profiting from this opportunity was made possible thanks to an agreement with the EU called the ‘Deep and Comprehensive Free Trade Area (DCFTA)’. This is a free trade area established between three Eastern countries (Moldova, Ukraine and Georgia) and the European Union, in effect as of July 2016.
The loan is part of the EU4Business-EBRD Credit Line, which aims to help local places of business to improve their product quality and upgrade their services. This improvement is necessary in order to align to the standards enforced within the EU.
Commenting on this recent decision is EBRD’s Head of the Chișinău (Moldova’s Capital-City) office, Dimitri Gvindadze: ‘A successful private sector is a cornerstone of the economic development of Moldova and the EBRD is keen to continue its support for businesses with this new credit line […] This is to everyone’s benefit: Moldova’s private sector companies, local and European consumers, and the Moldovan population as a whole, all stand to gain from increased regional trade and investment integration, which can foster economic growth and employment’.
Data shows that Moldova’s agreement with the EU is an important step towards future reforms. The free trade area creates multiple opportunities for investments inside the country and offers access to a complex and profitable European market.
The recent loan is part of a larger project, valued at 380 million EUR, which refers to EBRD loans and trade guarantees for local banks. The EU is also making 19 million EUR available for investment incentives, technical assistance and risk-sharing. In total, EBRD has invested more than 1,1 billion EUR in around 110 projects in Moldova.
