MICROCAPITAL BRIEF: European Union (EU), European Bank for Reconstruction and Development (EBRD) Launch $78m Program to Support Small, Medium-sized Enterprises in Georgia, Moldova, Ukraine

The European Union (EU) and the European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, have announced a joint program to support small and medium-sized enterprises (SMEs) in Georgia, Moldova and Ukraine. The program will offer loans to SMEs with the aim of helping them grow and identify trading opportunities with EU members. The program includes a grant of EUR 10 million (USD 11.3 million) that will be used to guarantee EBRD’s funding in value of approximately EUR 69 million (USD 77.9 million). The EBRD funding will be lent to local institutions, which will on-lend the money to SMEs in amounts that will range from EUR 500,000 (USD 564,900) to EUR 10 million (USD 11.3 million).

Mr Johannes Hahn, the Commissioner for the European Neighborhood Policy and Enlargement Negotiations of the EU, said that “small businesses are crucial to stimulate growth and create jobs. I am happy to announce the launch of this new program that will help local businesses take full advantage of the Association Agreements and the Deep and Comprehensive Free Trade Areas”[1]. Mr Bruno Balvanera, EBRD’s Director for the Caucasus, Moldova and Belarus, added that “we are pleased with this new opportunity to extend the support to local small businesses. The EBRD has a strong track-record in this sector, which provides a solid platform to build on. Our joint program with the EU will benefit local banks as on-lenders and local businesses as recipients through the provision of finance and the sharing of know-how and expertise”[1].

With total assets of EUR 49 billion (USD 65 billion), EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects in 34 countries during 2013.

By Alíz Crowley, Research Associate

About European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and it is owned by 64 countries as well as the European Investment Bank and the European Union as of 2014. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). With total assets of EUR 49 billion (USD 65 billion), EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects in 34 countries during 2013.

[1] European Bank for Reconstruction and Development (EBRD), EBRD and EU step up support for small businesses in Georgia, Moldova and Ukraine

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