1. NATIONAL LOAN GUARANTEE FUND FOR SMEs GUARANTEES OF NLGFSME – A WAY FOR FACILITATING THE ACCESS OF SMEs TO FINANCING International Forum for Investments Bucharest, October 14th, 2004

2. NLGFSMEs is a financial institution dedicated to SMEs; It operates since April 2002; The Fund is a joint stock company fully owned by state, which is represented by National Agency for SMEs and Cooperatives; The current shareholders' equity is of about 13.5 million Euro. The state will increase its contribution to the share equity to about 40 million Euro until 2006; NLGFSME has a number of 13 territorial offices and co-operates with 15 commercial banks. GENERAL DATA

3. MISSION AND OBJECTIVES NLGFSME is an instrument of the Government for the implementation of its policies focused on the development of SME sector; The mission of the NLGFSME is to grant guarantees for financial instruments taken by SMEs from commercial banks or from other sources authorized by law; The objectives are to facilitate the access of SMEs to financing and to increase the volume of investments made by SMEs in productive sectors.

4. The Fund guarantees: Long and medium term loans for investments; Short term loans (for financing working capital needs); Bank letters of guarantee (i.e. as a guarantee for participating to tenders, for payments in advance etc.); Leasing contracts. NLGFSME guarantees loans in Romanian currency (ROL), as well as in foreign currencies. GUARANTEED FINANCIAL INSTRUMENTS

5. Eligible beneficiaries are only SMEs that fulfill the conditions of Law no. 346/2004, defined as: 1. Legal persons: Having up to 250 employees; Having an annual turnover of up to 8 million EURO; Independent of large companies (they have not as a shareholder or associate a legal person or a group of legal persons that holds more than 25% of the share capital of the SMEs and is not included in the SMEs category). Fully privately owned. 2. Self-employed persons (including family associations). 3. Cooperative societies. GUARANTEEING CONDITIONS

6. Credit approved by the bank; Participation of the SME with own resources to the investment that is to be financed; Good management & Credit worthiness of the SME; Collateral of SME shall be constituted in compliance with the rules of each commercial bank; Have not unpaid debts to state budgets; Don’t ask for financing in order to refinance their previous loans.

7. Guarantees for existing SMEs: Cover up to 75% of the value of medium and long term credits, but no more than 500,000 Euro; Cover up to 60% of the value of short term credits, but no more than 400,000 Euro; Commissions: Annual premium of 1.5% (for short term credits) and between 1.6-3.5% (for medium and long term credits) of the outstanding guarantee. GUARANTEE PRODUCTS

8. Guarantees for start-ups: Cover up to 80% of the value of medium and long term credits, but no more than 500,000 Euro; Cover up to 70% of the value of short term credits, but no more than 400,000 Euro; Commissions: Annual premium of 1.5% (for short term credits) and between 1.6-3.5% (for medium and long term credits) of the outstanding guarantee. GUARANTEE PRODUCTS

9. Guarantees for self-employed persons: Cover up to 75% of the value of medium and long term credits, but no more than 75,000 Euro; Cover up to 60% of the value of short term credits, but no more than 75,000 Euro; Commissions: Annual premium of 1.5% (for short term credits) and between 1.6-3.5% (for medium and long term credits) of the outstanding guarantee. GUARANTEE PRODUCTS

10. NECESSARY STEPS FOR GETTING THE GUARANTEE 1.The SME submits loan documents to financing bank. 2.If Bank, as a result of analyzing loan documents, considers that the project is viable, but the SME has not enough collaterals, it requests to the Fund to share the risk by issuing a financial guarantee for that commitment. 3.If the Fund, based on its own analysis, agrees to guarantee the credit, the Bank and the Fund sign a guarantee contract. 4.Bank signs the loan contract with SME. BANK NLGFSME SME 1 4 2 3

11. GUARANTEE PAYMENT PROCEDURE 1.If the credit contract is forfeited by the Bank, the Bank turns simultaneously to the SME for selling its collaterals, and to the Fund with a payment request. 2.At the first request of the Bank, the Fund pays 50 – 75 – 100% of guarantee amount and in the same time it subrogates in the rights of the bank on SME’s collaterals. 3.Between the Bank and the Fund takes place the regularization of payment differences. 4.After the regularization between the Bank and the Fund, if the Fund has a damage, it has the right to turn against SME through a complaint addressed to the court. In this case, the Fund recovers its debts, according to the law, selling SME’s goods, other than those that were used as collaterals by SME. NLGFSME SME BANK 1 13 4 2

12. Total volume of credits which were guaranteed: over 35 million Euro; Value of issued guarantees: 15 million Euro; The average time for analyzing and approving a guarantee was of 9 days. NLGFSME STATISTICS August 1, 2002 – June 30, 2004

13. Distribution of the volume of granted guarantees by sectors of activity: Industry:53.37% Construction:23.15% Services: 9.59% Agriculture: 7.71% Transportation: 6.18% NLGFSME STATISTICS August 1, 2002 – June 30, 2004

14. National Loan Guarantee Fund for SMEs Address: 155 Calea Victoriei, 6 th floor Bucharest, Romania Phone: + 40 21 310-1807 Fax: + 40 21 310-1857 office@fngcimm.ro www.fngcimm.ro CONTACT