1. SME INITIATIVE IN ROMANIA
BUCHAREST, July 2017

2. SME Initiative (1) TO 3 – enhancing the competitiveness of SMEs
Investment priority 3d – supporting the capacity of SMEs to grow in regional, national and international markets, and to engage in innovation processes
SO: improve SME access to finance by addressing challenges that banks face:
Covering 60% of losses for defaulted loans (with no cap at portfolio level), addresses credit risk and/or lack of collateral at the SME level
Providing capital relief to the banks due to the involvement of EIF (0% risk weighting on the guaranteed part of each loan under CRD IV), addresses regulatory capital scarcity at the banks’ level

3. SME Initiative (2):
SMEI envisages uncapped portfolio guarantees and partial capital relief to banks building up new portfolios of SME loans. 60% of the total portfolio will be covered on a loan by loan basis. ESIF will cover the first loss piece and a fraction of the lower mezzanine tranche.
EIF will join to cover the mezzanine risk. Senior tranches will be guaranteed by EIB, while the originating bank must retain at least 20% risk.
Newly originated loan portfolios
Risk tranching
Guarantor
SME1
Senior tranche
Mezzanine tranche
First loss piece
European
Investment
Fund
Financial Institution 1
Uncapped guarantee
on portfolio
level
SME2
EIB Risk
EIF guarantee
SME3
60% guarantees on a loan-by-loan basis.
At least 20% risk retained by originator
Member State contribution
EIF, H2020
EFRD
SME1
ESIF Risk
Financial Institution N
EIF guarantee
SME2

4. SME Initiative (3):
Priority axes 1 – Increasing Romanian SMEs access to financing
OP budget – 100 mil. Euro (7 mil. Euro management costs and fees)
Result indicator – proportion of credit requests approved
No of estimated beneficiaries – 2500 of SMEs
Estimated leverage (for 60% of the defaulted loans per portfolio)– min 4

5. SME Initiative (4)
Memorandum of the Government: Participation of Romania in SME Initiative from ERDF allocation (8 July 2015) mil. Euro;
Modification of Partnership Agreement/Regional Operation Programme – in order to include the new OP;
The elaboration, negotiation and approval of SMEI OP ( );
The signature of the Funding Agreement between Romania and EIF and of the Intercreditor Agreement between Romania, EIF, EIB and EC ( );
First meeting of the Monitoring Committee and Investment Board ( )
Approval of the rules of procedures
Approval the qualitative criteria for the call of expression of interest from banks
Launching the call of expression of interest to select financial intermediaries ( ) – deadline 31 March 2017

6. SME Initiative(5)
Payments made from national funds until MA accreditation
first payment request: mil euro ( euro management costs and fees)
second payment request: mil. euro
Designing and approval of de minimis scheme (April 2017) – applicable until
Designation process: still pending the MA accreditation
Signing of the first operational contract – 5 May 2017.
Second meeting of the Monitoring Committee and Investment Board ( )
First AIR approval
Signature event with all the financial intermediaries selected – 21 June 2017:
Signed: Raiffeisen Bank (RON si EUR), BCR (RON si EUR), ProCredit (RON), Banca Transilvania (RON si EUR), BancPost (RON si EUR)
Pre-selected, signature pending: ING (RON si EUR), Libra Bank (RON si EUR), BRD (RON)

7. Financial Intermediaries
Bank
Currency
Max. Portfolio
Agreed Portfolio
Guarantee
SMEs
Raiffeisen
EUR 40 30 18
3300
RON
300
180
108
BCR 20 15 9
850 80 44
26,4
ProCredit 22
13,2
290
Transilvania 28
16,7
470 71
42,4
Bancpost 16
9,6
1,160 64
38,4

8. Issues to be clarified (1)
Decision CE 660/2014 includes formula for calculating de Gross Grant Equivalent (GGE), that allow ex-ante determination of the state aid amount (at the signature of the financing contract)
Granted state aid will be reported once, at the signature of the financing contract
Competition Council – according to Regulation 1407/2013, reporting of the state aid must be made each time the SMEs make an reimbursement to the Financial Intermediaries, based on the eligible financing contracts
In this case, the formula for GGE in the Decision 660/2014 could need to be modified in order to include a discount rate
Correspondence with DG COMP

9. Issues to be clarified (2)
RegAS – state aid register: data on all the state aid granted in Romania to all beneficiaries
according to art. 29 from Regas Regulation, all the state aid must be reported both, when is granted and when is paid
pending issues:
the frequency of Regas reporting or other possibilities (data base interconnection)
Recovery of the illegal state aid

10. Future activities Successfully closure of the MA designation process
Initiating the reimbursement from the EC and payment back of the amounts borrowed from the Ministry of Public Finance
Clarifying the issues related to monitoring, reporting and recovery of the state aid
Product Launching – loans availability on the market (FI)
monitoring the implementation of the Operational Agreements with Financial Intermediaries ( commonly with EIF)

11. The Managing Authority for the SMEI email: madalina.istrate@mdrap.ro
Thank you!
Ministry of Regional Development, Public Administration and European Funds
The Managing Authority for the SMEI
Tel: , Fax: