
Moldova introduces a new mechanism for financing small and medium-sized enterprises - portfolio guarantees.
In particular, this is provided by relevant amendments to the Law on Small and Medium Enterprises, adopted by the Parliament in the second reading. According to the draft law, "loan portfolio guarantee is an undertaking by which an institution that manages loan guarantee funds assumes the credit risk associated with a portfolio of eligible loans granted under a cooperation agreement signed with a financial sector entity. The loan portfolio guarantees will be provided by the Credit Guarantee Fund, managed by the Organization for the Development of Small and Medium Enterprises (ODIMM). This fund will share the credit risk, guaranteeing loans received by small and medium-sized enterprises from banks or non-banking credit institutions. According to the authors of the project, a group of PAS MPs, the implementation of such a guarantee mechanism provides a number of advantages compared to individual guarantees. It will expand access to finance for small and medium-sized enterprises, simplify the issuance of loans, and eliminate the procedure for prior approval of the ODIMM guarantee. The waiting time will be reduced by 5 days, the use of guarantor resources to manage the guarantee portfolio will be optimized, and the risk of corruption will be reduced. In addition, the ODIMM fee of 0.5% for providing a guarantee will also be canceled as of February 15. Nearly 600 economic agents have so far benefited from the Guarantee Program, having access to over 1 billion lei in loans. // 01.04.2022 - InfoMarket