EIB unlocks €77 million in loans for Moldovan small businesses

The European Investment Bank (EIB) signed guarantee deals with two Moldovan banks that will unlock over €77 million in fresh loans for small businesses, according to the press release. ProCredit Bank and Victoriabank will use the EU-backed guarantees to offer better loan terms to almost 1,000 companies across Moldova.

The deals reduce how much collateral businesses need to put up for loans, making it easier for companies to borrow money and expand. The guarantees come through the EU4Business Guarantee Facility, funded from the European Union’s budget. EIB Vice-President Teresa Czerwińska said the agreements show “strong commitment to Moldova’s private sector” and will help businesses “invest, grow, and create new jobs.”

Moldova’s small businesses have struggled to get affordable credit, especially companies that don’t own much property or equipment to use as collateral. Banks typically require borrowers to pledge assets worth more than the loan amount, which locks out many entrepreneurs who have good business ideas but few physical assets.

The guarantees work by having the EU backstop part of the risk if borrowers can’t pay back their loans. This lets banks lend to riskier clients and charge lower interest rates. ProCredit Bank, which focuses heavily on small business lending, said the guarantee lets them “support businesses lacking collateral” and cover construction projects where companies don’t have the usual security. Victoriabank CEO Levon Khanikyan said the program will offer “flexible credit solutions tailored to each business” so entrepreneurs can “invest in equipment, expand their operations and seize new opportunities.”

The timing matters because Moldova is working toward EU membership, which should create new business opportunities as companies get access to the European single market. EU Ambassador Iwona Piórko said small businesses “are the main driver for innovation, job creation, economic growth and prosperity” in Moldova.

The program should help businesses in manufacturing, agriculture, trade, and other sectors get the financing they need to grow and take advantage of Moldova’s potential EU accession.