The state will grant small and medium – sized enterprises (SMEs) guarantees of 80 per cent of the amount of loans contracted from banks for business development. The provisions are included in the new Regulation of activity of the Loan Guarantee Fund (FGC), managed by the Organisation for Development of Small and Medium – Sized Enterprises (ODIMM), the government’s communication and protocol department has reported.
The document aims to facilitate access to finance for SMEs that lack sufficient collateral for contracting a loan, but also to increase transparency within process of granting financial guarantees.
So, as to benefit from state guarantees, entrepreneurs must submit a request to one of ODIMM’s partner banks, after which the bank will examine the application for loan and file a request for guarantee with ODIMM at the enterprise’s request. ODIMM will review the guarantee application within up to 5 business days, and if accepted, the bank and applicant will be able to sign the loan agreement.
The financial resources of FGC consist of state budget allocations, assistance from donors, but also from other sources.
The role of issuance of financial guarantees for loans obtained by SMEs was awarded to ODIMM in 2007. Up to date, ODIMM has issued financial guarantees for over 300 companies, amounting to MDL 92 million, which facilitated obtaining of bank loans of MDL 274.5 million. The financing of SMEs has helped to implement investment projects that have allowed creation of over 500 new jobs.
