Moldovan government provides new mechanisms of backing business environment

Chisinau, 9 March /MOLDPRES/ - Small- and medium-sized entrepreneurs will be able to easier  access loans provided by commercial banks partners of the Organization for Small- and Medium-sized Enterprises Sector Development (ODIMM), the government’s communication and protocol department has reported.    

The cabinet today approved amendments to the Law no 179/2016 on small- and medium-sized enterprises, which will allow simplifying the procedure of accessing loan guarantees requested by small- and medium-sized enterprises (SMEs) from banks. Thus, unlike the individual guarantees which are presently provided by ODIMM, the portfolio guarantees will guarantee a portfolio of loans provided to SMEs by creditor (banks), in line with the pre-established criteria and the need of individual coordination of the guarantee between the bank and ODIMM is eliminated.       

The implementation of this guarantee mechanism offers a string of advantages against the individual guarantees:

(i) short processing time;

(ii) simplified of demanding guaranteed loans;

(iii) poor resources on behalf of the guarantor and creditor for the management of the guaranteeing process;   

(iv) enhanced impact in the economy, through facilitating the access to financial resources by the business environment and increasing the volume of investments generated in the economy.

The initiative came with the enhanced growth of the number of applications of guarantees received on behalf of small- and medium-sized enterprises during 2021. The number of new guarantees on the period of the last year exceeded five-fold the number of guarantees issued in 2020. Presently, the Loans Guarantee Fund (FGC) has a ceiling of about 600 million lei.   

Also, to back entrepreneurs, the Economics Ministry and ODIMM announce also the removing of the guarantee fee (0.5 per cent) for all products of guaranteeing provided by ODIMM for 2022. At the same time, decision-makers plan to extend the quota of guaranteed loan up to 80 per cent on all guarantee products of ODIMM.  

FGC is an entrepreneurial support instrument, created and managed by ODIMM, the task of which is to issue financial guarantees requested by SMEs from partner financial institutions (commercial banks). The active guarantee products cover up to 80 per cent of the sum of the loan requested and the value of guarantees varies from 500,000 lei for beginner companies up to 7 million lei for exporting companies. One Moldovan leu provided as financial guarantee facilitates the access to 2.6 lei as loan and generates investments in economy worth 3.3 lei.       lei.

Photo: Government