EIF Provides €3 Million Loan to Patria Credit to Expand Access to Finance for Romanian Micro-Farms

EIF Provides €3 Million Loan to Patria Credit to Expand Access to Finance for Romanian Micro-Farms

(IN BRIEF) The European Investment Fund (EIF) has signed a €3 million subordinated loan agreement with Patria Credit IFN to support micro-farms and expand access to finance in Romania. The transaction, backed by InvestEU, aims to help Patria Credit reach more clients and grow its portfolio, particularly in underserved areas with limited credit options. This loan builds upon the successful partnership between the EIF and Patria Credit, which has facilitated loans to over 4,200 micro-businesses. Patria Credit is the largest financier of small farms in rural Romania and plans to sustain its growth while expanding into new geographic regions in 2023.

(PRESS RELEASE) LUXEMBOURG, 4-Jul-2023 — /EuropaWire/ —  The European Investment Fund (EIF), part of the European Investment Bank Group and established to support Europe’s micro, small and medium-sized enterprises (SMEs), has announced the signing of a subordinated loan agreement with Patria Credit IFN, amounting to RON 15 million (€3 million). This transaction, backed by InvestEU, aims to empower Patria Credit in expanding its client outreach and portfolio size, particularly in the area of micro-farms with limited access to traditional credit.

The ten-year loan will not only facilitate Patria Credit’s growth but also enhance its ability to attract additional external funding resources. The subordinated loan is granted under the InvestEU Capacity Building Investment product.

This agreement builds upon the successful partnership between the EIF and Patria Credit, which commenced 11 years ago and leveraged various support instruments. Patria Credit has utilized these instruments to provide EU-guaranteed loans to micro-businesses, particularly in rural regions, thereby improving their access to finance. To date, over 4,200 credit agreements, equivalent to over RON 129 million, have been extended to local micro-businesses through the Employment and Social Innovation (EaSI) and InvestEU programs.

EIF Chief Executive Marjut Falkstedt said: “Capacity-building instruments have proven to be a very useful tool, connecting European institutions with local partners in order to make financing more readily available for the smallest players in the economy. That’s why, through the InvestEU programme, we are happy to be joining forces with Patria Credit once again, to strengthen their capital base and ultimately generate fresh support for Romanian farmers and vegetable growers during challenging times.”

“This new loan proves the trust that EIF has in us, and it attests to our sustained growth in recent years and our dedication to rural microfinancing in Romania. In our more than 19 years of experience with rural entrepreneurs, I have learned that financial inclusion is one of the important steps for the development of the economy. The partnership with EIF is a strategic one and it helps us to develop and continue our mission of improving the level of financial inclusion in Romania,” said General Manager of Patria Credit Raluca Andreica.

Patria Credit achieved a net profit of €1.55 million in 2022, with a reported 22% increase in its portfolio value, reaching €32.5 million. As the largest financier of small farms under 10 hectares in the Romanian countryside, more than 79% of the micro loans granted by Patria Credit are offered with the InvestEU guarantee through its strategic partnership with the EIF, a part of the European Investment Bank Group (EIB Group). The institution primarily serves clients in Romania’s major vegetable-growing basins, supporting agricultural investments through loans.

Looking ahead to 2023, Patria Credit’s development plans include sustained growth while retaining their traditional customer base, as well as expansion into underserved geographic areas within Romania.

Background information

About the European Investment Fund

The European Investment Fund (EIF) is part of the EIB Group. It supports Europe’s small businesses by improving their access to finance through a wide range of selected financial intermediaries, such as banks, guarantee and leasing companies, micro-credit providers and private equity funds. The EIF designs and offers equity and debt financing instruments fostering EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment.

About InvestEU

The InvestEU programme provides the European Union 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 EU policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. 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 will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

About Patria Credit IFN

Patria Credit IFN SA is a non-bank financial institution (NFI) that supports the efforts of small farmers and entrepreneurs and their positive impact on rural communities. Specialising in farmer finance, Patria Credit is a member of the European Microfinance Network (EMN) and Microfinance Centre (MFC) and the first non-bank financial institution dedicated to microfinance in Romania, with almost 20 years of experience and more than 18 000 clients financed. Patria Credit’s history began in 1996, initially as a programme of World Vision, later evolving into a foundation and then an IFN. Today, Patria Credit IFN’s activity is recognised by the European Code of Good Conduct initiated by the Directorate for Employment, Social Affairs and Inclusion of the European Commission, for the quality and impact of the microfinance activity carried out in Romania. Part of the Patria Bank Group, Patria Credit IFN is involved in projects to support agriculture, develop rural areas and support the transition of small farmers to sustainable agriculture (Intelligent Farm Programme).

Press contacts

Daniel Kozak, d.kozak@ext.eib.org , tel.: +352 4379 70905
Website: www.eib.org/press — Press Office: +352 4379 21000 — press@eib.org

Vera Ularu, vera_ularu@patriacredit.ro, tel.: +40727261626
Website: www.patriacredit.ro

SOURCE: European Investment Fund