The European Commission has adopted today the "SME Initiative" Operational Programme for Romanian small and medium-sized enterprises (SMEs) 2014-2020, worth €100 million. The value of the investment provided by the European Regional Development Fund (ERDF) in the form of guarantees is expected to quadruple to €400 million, thanks to the leverage effect of private investment in SME loans.

The SME Initiative for Romania is the fifth of its kind to be adopted for 2014-2020, encouraging Member States to make use of this joint initiative, developed by the Commission and the European Investment Bank (EIB) Group to boost access to finance for Europe's cash-strapped small businesses.

European Commissioner for Regional Policy Corina Crețu said: "Today Romania joined the group of Member States that want to improve the business environment for SMEs, by pledging 100 million of EU Regional Fund to help finance the small and medium enterprises. In a country where SMEs represent over 99% of the total number of enterprises and face serious needs of external financing, this programme supports them in order to access loan products in better conditions. This Initiative will also enable SMEs to be more innovative and competitive and to grow on regional, national and international markets."

Vasile Dîncu, Romania's Minister of Regional Policy and Public Administration added:

"Targeting one of the critical difficulties for Romanian SMEs – the access to financing and providing a leverage of 4, this innovative tool that is called the SMEs Initiative is intended to be a major booster for competitiveness. This supports SMEs to succeed on the market in order to overcome the first stages of their life-cycles, allowing them to grow – both numerically, but also as dimension and value and, by doing so, to be able to compete internationally. Providing a risk-sharing approach, the SMEs Initiative creates a win-win framework both for SMEs - as loans demand financial intermediaries – and on the loans' supply side, thus supporting the whole business environment. "

Background

A 2013 ex ante assessment of the EU SME Initiative outlines the findings of a survey on access to finance for small and medium-sized companies, assessing the difficulties in accessing external finance and estimating the amount of loans that firms would need but cannot obtain from the banking system. It shows that for a large share of Romanian SMEs the access to finance represents their greatest concern.

A recent additional assessment performed for Romania estimates the funding gap of external financing for SMEs at around €3.4 billion until 2020, covering the need of various types of financial instruments (guarantees, risk sharing loans, micro-crediting, equity investments).

The €100 million pledged to the SME Initiative programme was re-allocated from the Regional Operational Programme 2014-2020, where it was initially planned for guarantees. Preserving this original goal, the SME Initiative programme will implement the scheme in a more efficient manner thanks to the involvement of the EIB group and funds from Horizon 2020.

On 6 August 2014, the European Commission adopted a "partnership agreement" with Romania setting out the strategy for optimum use of European Structural and Investment Funds in the country for 2014-2020 (IP-14-907). Romania will receive €23 billion in total Cohesion Policy funding over 2014-2020.

The European Regional Development Fund (ERDF) aims to strengthen economic and social cohesion in the European Union by reducing imbalances between its regions. The ERDF will invest more than €197 billion in the regions of Europe throughout 2014-2020.

More information:

The SME Initiative

Financial Instruments in Cohesion Policy

Cohesion Policy and Romania

Partnership Agreement with Romania

European Commission Staff Working Document – 'Ex-ante assessment of the EU SME Initiative'

Inforegio website

Twitter: @EU_Regional  @CorinaCretuEU  #ESIFunds #CohesionPolicy

Contact Details of the national authority:

Ministry for Regional Development and Public Administration

Str. Apolodor number 17

Bucharest Sector 5

Romania

Tel: +40 37 211 14 09

info@mdrap.ro

www.mdrap.ro