Financed ProjectsPrime Capital - MSME financing

Identification Code:

OP/21/0030

Total Operation Cost:

4.000.000

Maturity:

48 months

Operation Status:

Description and Purpose of the Operation:

The proceeds of the Loan for Micro and SME Financing (MSME) shall be used by the Borrower exclusively for the purpose of financing Sub-Loans to beneficiaries which satisfy the eligibility criteria agreed with the Bank. The Loan aims to contribute towards expanding of the MSME lending program of one of the leading non-banking micro-finance companies in Moldova and thus facilitate access to finance for micro, small and medium sized private businesses and individual entrepreneurs.

Countries of Operation:

Moldova (100,00 %)

Financial Product:

SME's

Sector:

Financial Institutions

Domain:

Private

Borrower/Client:

Prime Capital is a non-banking financial institution specialized in residential mortgage and micro and SME lending, registered and operating in the Republic of Moldova since 2006.

Co-Financiers/Participants:

.

Guarantors/Sponsors:

.

Developmental and Regional Cooperation Impact:

Access to finance is among the top challenges for doing business in Moldova. Against low loans to GDP ratio, compared to peers, there is likely high demand for financing from the private sector. Given this situation, the provision of funding through the non-banking sector to the private sector is a welcome development. The utilization of EUR 4mn provided by BSTDB for SMEs would have modest but favorable economic benefits for the Moldovan economy, the most relevant being additional tax revenue gains from increased economic activity under the additional amount provided. In addition, the additional amount provided will help further enhance benefits such as increases in employment, increase in export capacity and competitiveness, and multiplier effects for other parts of the economy. The regional cooperation element is similarly expected to be modest. Other BSTDB countries are important trade partners for Moldova so to the extent SMEs benefiting from financing from the operation engage in export activities, there will be regional cooperation benefits.

Environmental Classification and Impact (summary):

Environmental and Social (E&S) category FI. The Borrower has adopted the Policy on Social and Environmental Responsibility in Sep 2020 which is its main policy document with respect to E&S management. The Policy clearly states the mission, the objectives, and the commitments of the Borrower, as well as the activities which it does not support. The document is largely compatible with the principles of responsible financing and the Bank’s Exclusion List. Considering the risk profile of the portfolio and the average size of its loans no other E&S due diligence is deemed necessary.

Operation Leader:

Financial Institutions II

E-mail:

fi2@bstdb.org