Note: the texts under all the headings, with the exception of 'Results achieved', describe the situation before the start of the project.
Romanian-Swiss Program for SMEs
SME finance and thus the development of the Romanian private sector have been identified as a priority under the Swiss-Romanian Cooperation Programme. The Romanian-Swiss Program for SMEs is responding to the existing gap on the Romanian financial market by providing investment loans, which are backed by preferential guarantees, to SMEs in the manufacturing, tourism, health, cleantech, transportation, IT, construction and technology sector. If an SME of one of these sectors fulfills certain quality criteria (i.a. operating license since at least one year, no arrears owed to Romanian authorities) as well as the lending rules and procedures of the participating commercial bank CEC Bank S.A., it is eligible for an investment credit in order to implement its business plan.
Promoting economic growth and improving working conditions
Access to external financing for micro-enterprises and SMEs
- Provision of loans up to the equivalent of CHF 300,000 to SMEs through the CEC Bank S.A. as Partner Bank (30% from the Bank’s own resources) and from the Swiss Contribution (70%);
- Provision of loan guarantees, if a SME cannot provide enough collateral; the Romanian credit guarantee agency can fund up to 80% of the loan amount;
- Establishing a pilot revolving fund for investment loans. The reflows from the 70% individual loan principals which were provided out of the Swiss Contribution can be re-granted to SME applicants during the lifetime of the program and beyond..
- Romanian Ministry of Public Finance and Romanian Ministry of Energy, Small and Medium Enterprises and Business Environment
Micro firms together with Small and Medium Sized Enterprises (SMEs) account for about 99.7% of the companies in Romania, and are the main provider of employment (66%). However, they generate only about 42% of value-added of non-financial companies in the economy and face a number of additional problems: Too many are very small enterprises and mostly active in intermediation such as retail, wholesale or any kind of brokerage; they are often unprofitable and one out of three start-ups fails after one year of operation. With 22 SMEs per 1’000 people, the density of SMEs in Romania is considerably below the EU average (42/1’000), thus revealing a latent, but untapped entrepreneurial potential. Moreover, foreign banks have drastically reduced their supply of finance to local subsidiaries in order to reduce their balance sheets, debt and credit risk. The relevant Romanian authorities are committed to ensure a favorable business environment for SMEs and to address the persistent credit crunch by way of implementing a number of SME support programmes, which facilitate their access to finance. These programmes under the auspices of the Romanian Ministry of Economy have so far benefited an estimated 11’000 SMEs (out of a total of 700’000). But there still exists a considerable gap on the market in terms of the availability of investment loans for SMEs in sectors with a high growth potential.
|Objectives||The program shall enable SMEs in eight priority sectors of the Romanian economy, which have an operating license since at least one year, no arrears owed to Romanian authorities and fulfill the lending rules and procedures of the participating CEC Bank S.A., to apply for an investment credit in order to implement their business plans.|
|Target groups||The direct beneficiaries are those SMEs in the eight target sectors which gain access to a credit under the program, as well as CEC Bank which is expected to further improve its credit lending skills and retain additional commercial customers. Indirectly, the work force of Romania will benefit by way of accessing additional employment opportunities.|
Achieved results: The Romanian Swiss Program for SMEs responded to the existing long-term credit gap on the Romanian financial market by providing secured investment loans to 500 SMEs. Thereby, the Program improved the access to long-term finance of promising Romanian SMEs and made them bankable. Thanks to the secured investment loans around 3,000 jobs could be created or maintained.
|Directorate/federal office responsible||
Swiss Contribution to the enlarged EU
The Economic and Services Support Department of the Agency for Implementing Projects and Programs for SMEs (AIPPIMM)
|Budget||Current phase Swiss budget CHF 24'500'000 Swiss disbursement to date CHF 22'364'264|
Phase 10 16.01.2014 - 30.06.2019 (Completed)