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CEB and Patria Credit sign a €10 million loan agreement to support microfinance in Romania
08 December 2023
Bucharest - The Council of Europe Development Bank (CEB) and Patria Credit IFN signed a €10 million loan, supported by the InvestEU guarantee programme, promoting small farmers and rural businesses, that often face limited access to financial services and are part of financially underserved communities in Romania as well as facilitating Patria Credit IFN SA’s digitalisation. The total financing programme, which totals €20 million, based on a 50% contribution from Patria Credit IFN SA and a 50% contribution from the CEB.
Patria Credit IFN SA’s loan aims to promote self-employment, focusing on helping participating entrepreneurs further develop an income-generating activity in rural areas that can ultimately contribute to job maintenance as well as job creation. addressing the specific needs of nano-farmers and micro-enterprises, the project will focus on small agricultural producers (individuals or companies, less than 50 hectares of cultivated land or equivalent other agricultural activities) and small rural enterprises (self-employed or other legal enterprises with activities other than agriculture) with a turnover of up to €200,000 (or the Romaninan Leu equivalent) and small businesses with less than 10 employees. Part of the resources will be dedicated to financing women-owned businesses.
Patria Credit will use CEB financing to go one step beyond its current clientele and reach the most remote small farmers, who are often left behind by traditional lending institutions because they are considered “unbankable” due to their lack of collateral and weak financial literacy.
“Through this loan, we are partnering with Patria Credit IFN SA to improve access to finance for microentreprises, with a focus on vulnerable groups and social impact. Supporting those who often face financial exclusion is essential to achieving continued progress on social cohesion,” said Tomáš Boček, CEB Vice-Governor for Target Group Countries.
“Our experience in rural communities shows that small business development generates an increase in the standard of living, which in turn has a social impact and leads to a change of priorities of the community members. They choose to invest more in education and to prioritise it more among their expenses. The study we developed last year in rural communities where we have been funding for over 10 years, reveals that in Scarișoara community, Olt County, the children of over 90% of Patria Credit clients enrol in and graduate from secondary school - in the Matca community, Galati County, school dropout has completely disappeared. The results of microfinance are real, and we look forward to supporting even more small entrepreneurs thanks to this collaboration with CEB”, said Raluca Andreica, General Manager of Patria Credit IFN.
With the CEB’s support, Patria Credit IFN will also accelerate its digital transformation that will bring it closer to small entrepreneurs from remote areas and allow it to continue building on its more than 25 years of social impact work in rural communities.
For further details: Vera Ularu, Marketing & Communication Coordinator, Patria Credit IFN SA, vera_ularu@patriacredit.ro, 0727.261.6 and Council of Europe Development Bank (CEB) Communications Division, info@coebank.org, +33(0)1 47 55 55 00
About Patria Credit IFN
Patria Credit IFN SA is a non-bank financial institution (NBFI) that supports the efforts of rural and small urban entrepreneurs and their positive impact on their communities. Specializing in farmer financing, Patria Credit IFN SA is a women-run organization and a member of European Microfinance Network (EMN) and Microfinance Centre (MFC) and is one of the first non-bank financial institutions dedicated to microfinance in Romania, with almost 25 years of experience and more than 18,000 clients financed. Patria Credit’s history began in 1996, initially as a program of the World Vision organization, later evolving into a foundation and then in an NBFI. Part of the Patria Bank Group, Patria Credit IFN is involved in projects supporting agriculture, rural development and the revival of agricultural education, such as Business Breeding, “Mândru să fiu fermier” (together with World Vision Foundation Romania), Foundation for Agricultural Development (FD Agri) etc. In 2021, Patria Credit and Patria Bank reactivated the Patria Credit Foundation, through which they aim to reduce social, economic and financial exclusion of rural communities, promote the popularization of sustainable agricultural practices, facilitate the growth of the new generation of young farmers and raise awareness of the importance of rural community development.
About the CEB
The Council of Europe Development Bank (CEB) is a multilateral development bank, whose unique mission is to promote social cohesion in its 43 member states across Europe. The CEB finances investment in social sectors, including education, health and affordable housing, with a focus on the needs of vulnerable people. Borrowers include governments, local and regional authorities, public and private banks, non-profit organisations and others. As a multilateral bank with an excellent credit rating, the CEB funds itself on the international capital markets. It approves projects according to strict social, environmental and governance criteria, and provides technical assistance. In addition, the CEB receives funds from donors to complement its activities.
About InvestEU
The InvestEU programme provides the EU with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the EU’s policy priorities, such as the European Green Deal and the digital transition. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub, and the InvestEU Portal. The InvestEU Fund is implemented through financial partners who will invest in projects using the EU budget guarantee of €26.2 billion. The entire budgetary guarantee backs the investment projects of the implementing partners, increasing their risk-bearing capacity and thus mobilising at least €372 billion in additional investment.