Erste Group, ERSTE Foundation and the Center for Economic Development Foundation launch micro lending operation in Romania
good.bee Holding (a joint-venture between ERSTE Foundation and Erste Group) partners with an experienced Romanian micro financing institution, the Center for Economic Development (CDE), to launch good.bee Credit, a micro lending operation in Romania. The new company, a non-banking financial institution (IFN) will provide micro loans and consultancy to low income clients and small entrepreneurs from rural areas and small towns through a network of 10 national offices covering 21 counties across the country.
good.bee Credit aims to provide access to loans for small entrepreneurs, and thus promote local economic development as well as job creation.
Traditionally banks are rather cautious or have limited interest in offering loans to non-bankable micro entrepreneurs or small business owners. Our experience in Romania shows that there is a great proportion of the population, especially in rural areas, which falls in that category. Our micro lending operation addresses specifically this segment of the population by financing their projects and helping them raise income, build up assets and invest in their own future, said Anca Ciobanu, CEO of good.bee Credit IFN SA.
Worldwide, microfinance has demonstrated that people with low incomes can be viable customers. good.bee provides sustainable business solutions to social challenges in Central and Eastern Europe. By extending the reach of responsible financial services to population segments who have no or limited access to banks, our aim is to enable stronger “economic citizenship” for over 35 million people in the region, who, based on our market research fall under this category. With some 45% of the population living in rural areas and over 8 million people without a bank account, Romania is a very important country for us – the first one where good.bee begins microfinance operations, said Sava Dalbokov, CEO of good.bee Holding Vienna.
In 1819, Erste Bank was the first to offer banking services to “everyone”. It was the first to bring these services to Central and Eastern Europe. Now the ERSTE Foundation and Erste Group are doing exactly the same as almost 200 years ago: offering simple and affordable financing products that can bring improvements to everyone’s daily lives, said Boris Marte, Member of the Board of ERSTE Foundation.
Within the newly set up joint-venture, the good.bee Holding Vienna will bring the resources of a strong financial partner, while the Romanian partner contributes with the expertise of a leading microlending organization with over 10 years of experience in the market. The newly set company (49% owned by good.bee Holding and 51% byCDE) will build on CDE’s successful track record (reaching until now over 4.500 clients and approximately $10 mil worth of loans – excellent portfolio quality with less than 1% default rate) to increase the reach and accessibility of affordable financing for small Romanian entrepreneurs.
good.bee Credit starts with approx. EUR 3 mil in equity – a capital base sufficient to support our planned lending activities over the next year. Until year-end 2010, our objective is to provide over EUR 15 mil in micro-loans, primarily serving small businesses in the rural regions of Romania. Additional financing for these loans will come from the Erste Group / BCR as well as from multilateral financial institutions, such as the European Investment Bank or the European Investment Fund. Our commitment is to ensure a strong capital base for good.bee Credit also in the coming years, to fully support the sustainable growth of the company, said Sava Dalbokov, CEO of good.bee Holding Vienna.
Micro loans & consultancy as core services
The new micro lending operation will continue to focus on micro loans and consultancy for small entrepreneurs such as: certified farmers (CPA), authorized individual (PFA), family enterprises (IF), individual enterprises (II), limited liability companies (SRL). The beneficiaries of the financing programs will be mainly entrepreneurs who run an activity that generates income and prove the ability to develop and maintain a sustainable business.
The areas covered by the micro credits will include agriculture, trade, small production or services and the loans could be used for working capital as well as for investment. The individual loan ceiling could go as much as up to EUR 50.000 and the maturities can go up to 5 years, depending on the financed activity and the customer’s history with good.bee Credit.
Servicing small entrepreneurs, which generally would have limited access to financing with traditional banking institutions, good.bee Credit will be able to provide fast processing and credit conditions that are adapted to the needs of this segment. Furthermore, our staff will work close to our customers at local level to coordinate micro-credit activity, train beneficiaries and supervise the reimbursement. Our ultimate intention is to offer support for creating sustainable businesses, concluded Anca Ciobanu, CEO of good.bee Credit.
Ms. Anca Ciobanu – CEO
Phone: +40 21212 0730
Fax: +40 212120729
Caderea Bastiliei 33, Sector I, Bucharest