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SMEs apply for EUR 15 bln bank loans under Govt.- backed program

Romanian small and medium firms (SMEs) have applied for loans worth RON 74 billion (over EUR 15 bln) in the first three weeks after the launch of the Government-backed lending program IMM Invest.

The demand is five times higher than the RON 15 bln (EUR 3.1 bln) planned size of the program. But the rate of success has been low as banks have so far rejected most of the requests processed.

As of May 13 at noon, 54,498 SMEs had placed applications for bank loans, compared to the target of 40,000 estimated by the Government, Ziarul Financiar reported. Of these requests, 46,638 have been sent to the banks.

Until the same date, the banks enrolled in the program have analyzed 193 applications, of which they approved 11 and rejected 182. This results in a financing approval rate of 6%, proof that access to state-guaranteed loans is not exactly straightforward.

"At this moment, we have fully approved, both by the banks and by us, 11 companies with a financing volume of RON 7.4 mln (EUR 1.5 mln). There are 17 more, with a financing volume of RON 21.25 mln (EUR 4.38 mln) that the banks have uploaded in the system, but not exported to our application yet. Banks rejected some 182 financing applications sent by SMEs," said Dumitru Nancu, general director of the National Credit Guarantee Fund for SMEs (FNGCIMM).

Local SMEs have demanded financing of RON 73.9 bln (EUR 15 bln), of which RON 21.9 bln for working capital and RON 52 bln for investments, according to Nancu.

The state guarantees 90% of the loans granted by banks under this program. It also subsidizes the interest and fees for this year.