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FNGCIMM: Banks need to become more involved in economy, leave their comfort zone

Banks should leave their comfort zone and become more active and involved in the economics area, Cristian Paun, Chairman of the Board of Directors of the National SME Credit Guarantee Fund (FNGCIMM), told on Thursday a new edition of the "vorbIMM" video-conference. 

"We all need to get out of our comfort zone and take some risks, some responsibility. I am talking here about the state which, through the Fund, has decided to become the partner of these entrepreneurs and to take over the risk exposure they currently have in relation to the banks. Then there's a comfort zone that the banks should leave. It's clearly not going to be like the period before this crisis. Banks need to become more active and more involved in the business area, the economy. Entrepreneurs also have to take a test, because they borrow this money. They will have to give this money back, which means that the responsibility and ideas with which they will come before the banks, having the state at their side, must be viable, generate sufficient future cash flows to be able to give that money back to the banks. So, we all have to run some tests, but I don't know if we're ready. And at the Fund there are some constraints related to the resources, especially the human resource, because there is a very large number of requests. Process automation is still at an early stage, but at least we have this hope that step by step we will eventually be able to serve this sector without which we cannot be better now or at any other time," explained Paun, at the said select video-conference.

In the analyst's view, the IMM Invest programme is a test for everyone, after the verification phase of the possible beneficiaries has been completed.

"IMM Invest is a test for everyone, because, after all, we have some initial ideas on the table. Two of the most important things are that the essential factor in the development of a nation especially today is clearly entrepreneurship, and the second idea is that this entrepreneurship cannot develop something without access to financing and capital. We have on the table a possibly good scheme to facilitate the SMEs' access to financing and we need to give each of us a test. For now, we have passed the simplest part of the mechanism, namely that we have verified that 50,000 possible beneficiaries have requested and are meeting a minimum condition for SMEs classification. From here on, the responsible part and the hard part begin. This test is given in partnership among the state - banks - entrepreneurs and not necessarily in this order," said Cristian Paun.

The National Council of SMEs of Romania (CNIPMMR) organizes on Thursday a new edition of the video-conference dubbed "vorbiMM", this time with the topic of the government program IMM Invest. 

IMM Invest is the largest SMEs support programme in Romania in the last 30 years. The main advantages brought by it are the following: the state insures up to 90 pct of the loan amount, the interest of the loans is fully subsidised by the state at least until the end of the year, zero commissions related to the state guarantee, zero prepayment fee of the loan, and the guarantee period is up to 72 months. 

For the SMEs applying for loans/credit lines for working capital, financing can reach up to 5,000,000 lei, guaranteed up to 80 pct for medium-sized enterprises and up to 1,000,000 lei, with a maximum guarantee of 90 pct, in the case of small and micro enterprises. The duration of the financing for working capital is a maximum of 36 months, with the possibility of extension for another 36 months, the interest rate being Robor at 3 months +2.5 pct/year. 

In the case of both types of loans, interest, costs for granting, monitoring and administering guarantees granted on behalf of and on account of the State will be borne from the State budget until 31 December 2020, with the possibility of extension.