This summary covers the expansion of the operations of I.C.S. Raiffeisen Leasing SRL (RLMD) through a shareholder loan from Raiffeisen Bank S.A (RBRO). RBRO has applied for a MIGA guarantee of €16.15 million ($20.58 million) to cover the shareholder loan for a period of up to six years against the risks of transfer restriction and expropriation of funds.
RLMD is expected to focus on leasing solutions for businesses, including for the acquisition of machinery, equipment and vehicles. 50 percent or more of the total number of borrowers supported by this investment are expected to be small and medium-size enterprises (SMEs). (In FY08, MIGA provided a $7.34 million guarantee for the first loan to support the start-up of RLMD.
The project is a Category FI under MIGA’s environmental review procedures.
This project is expected to contribute to the development of the financial sector in Moldova by improving access to finance, particularly to segments of the economy that are currently underserved. The financial sector in Moldova is also expected to benefit from the presence of experienced foreign banking institutions like RZB Group, in terms of strengthening standards by establishing best practices, developing new products, and fostering competition among financial institutions.
The World Bank Group’s country assistance strategy for Moldova, covering fiscal years 2005-08, places emphasis on the need to broaden financial sector intermediation, promote private investment and support the development of the private sector, particularly SMEs, in the country. The proposed investment fits well with the Bank Group’s strategy in this regard.