The International Bank for Economic Co-operation has provided 15 million Romanian lei to the non-bank financial company Mikro Kapital IFN S.A., one of the leaders of the Romanian national microcredit market. The deal is in the form of a revolving line of credit for a period of one year with the possibility of prolongation for another year.
Mikro Kapital specializes in lending to micro, small and medium-sized enterprises, and one of the industry's priorities is the agricultural sector. Farmers are the company's key customers. The company is a Romanian division of the international group with the same name. The Mikro Kapital Group invests and lends to financial institutions specializing in financing small and medium-sized enterprises in the CIS, Western Europe and Central America. Currently, the Mikro Kapital group of companies operates in the financial markets of Italy, Belarus, the Republic of Moldova, Armenia, Russia, Romania, Kazakhstan, Kyrgyzstan and others.
The funds provided by IBEC will be directed to the development of current activities – the expansion of the loan portfolio, which currently stands at about 150 million lei. Mikro Kapital plans to double it over the next three years.
Support for agribusiness is an important factor in socio-economic stability for Romania. According to the World Bank, at the end of 2020, about 20% of the country's working-age population is employed in agribusiness. Expanding access to financial resources will contribute to a more dynamic development of agricultural enterprises, modernization and technological renewal of farms.
By investing in the resource base of Mikro Kapital, IBEC contributes to the implementation of important tasks for Romania aimed at increasing efficiency and achieving sustainable growth in one of the key sectors for the economy, maintaining and creating jobs in rural areas. Support for small scale farming has been identified by the United Nations as one of the important measures to combat food shortages and to ensure food security in the framework of achieving Sustainable Development Goal 2, which is one of the priority SDGs in the updated IBEC Strategy.