Banca de Investiții și Dezvoltare (BID) has recently launched the official invitation to credit institutions, non-banking financial institutions and leasing companies to participate in the pre-selection process for the new financial product “SME Portfolio Guarantee”. The initiative is a step towards strengthening the financing capacity for small and medium-sized enterprises in Romania, with a focus on sustainable investments and working capital, including start-ups and the liberal professions.
The product offered by the IDB is designed to cover a significant part of the credit risk associated with SME financing through an irrevocable, first-demand guarantee. The objective is to increase access to credit for companies that are experiencing difficulties due to lack of traditional collateral or high financing costs. By applying the BID guarantee, financial intermediaries will be able to reduce collateral requirements, make lending conditions more flexible and improve commercial terms for end beneficiaries.
Interested institutions can submit applications until 30 June 2025 and the assessment will be carried out in three stages: pre-selection, due diligence and, if successful, the signing of the guarantee agreement. Criteria include the financial soundness of the intermediaries, their experience in SME lending and their ability to integrate ESG principles into their operations.
The IDB guarantee can cover up to 70 per cent of the value of a transaction, with a 10 percentage points increase for innovative, start-up or women-led companies. The maximum amount of guaranteed financing can reach up to 10 million lei per transaction, with a repayment period of up to 10 years. The guarantee fee is set at 0.7% per annum and the mechanism for assessing performance and adjusting the ceiling allocated to each intermediary ensures efficient use of the available funds.
In the medium and long term, the BID programme aims to contribute to a structural change in the Romanian SME financing market. It also targets segments that have traditionally been underserved: firms with no credit history, companies active in peripheral geographical areas, entrepreneurial initiatives in sectors perceived as risky or innovative. In addition, by aligning with European sustainability objectives, the product responds to increasingly pressing needs of the green and digital transition.
BID does not impose an automatic selection – all applications are analysed on the basis of a transparent methodology and rejected institutions can lodge an appeal within 30 days. The selected intermediaries will be published on the Bank’s official website as guarantee agreements are finalised.
Banca de Investiții și Dezvoltare is the only development bank in the country that is 100% owned by the Romanian state, through the Ministry of Finance. It was created at the end of 2023 by the National Recovery and Resilience Plan and has four strategic objectives: facilitating access to finance for small and medium-sized enterprises, including microenterprises and start-ups, facilitating the financing of viable infrastructure projects, both local and regional as well as national, and attracting private capital for investment, supporting the process of accessing and utilising European funds and the associated multiplier effect, providing technical assistance. Direct lending products include support for investments in public utilities for the improvement and extension of water, electricity, gas and district heating networks, research, development and innovation activities to increase economic competitiveness, and energy efficiency and sustainability transition projects.