Irina Efremova, Senior Product Manager, Time-to-Yes (Band) Department at maib, in an interview with journalist Pavel Zingan.
Irina, hello. In today's interview, I want to help entrepreneurs understand about the European Investment Bank (EIB) Portfolio Guarantee. First of all, what is the European Investment Bank?
The European Investment Bank, established in 1958, is the European Union's lending institution for financing regional development through long-term loans. Since starting its activity in the Republic of Moldova in 2007, the EIB has provided more than 1.29 billion EUR for various projects, supporting sectors such as transport, energy, agriculture, and municipal infrastructure.
As an entrepreneur, can I get a maib loan guaranteed by the EIB? If so, what do I need to do?
Of course. This makes it easier to access the loan. A portfolio guarantee will help you if you need more than existing guarantees. Or, in the case of unsecured loans, you can get a higher amount. Also, in case of a lack of credit history or additional risks, the bank can lend you a larger amount for a longer term. Your credit possibilities increase, which is only possible with a guarantee. Unlike taking out an individual guarantee to secure a loan, you don't have to do anything to benefit from a portfolio guarantee.
Please tell me if I understand correctly. An individual guarantee is when I don't have suitable collateral, and the loan requires providing collateral. Can I receive a guarantee from a third party?
Yes, but with the caveat that the bank has to have a partnership agreement with that third party to offer guarantees because we need to be sure of the guarantor. This is how we work, for example, with ODA. Under certain conditions, ODA provides individual guarantees to entrepreneurs for bank loans. But for this, you will have to go through an individual verification by ODA of eligibility and risk level, conclude a guarantee agreement, and pay a fee, in addition to a credit check at the bank, through an individual verification by ODA of eligibility and risk level, conclude a guarantee agreement, and pay a commission.
What about a portfolio guarantee?
In this case, everything is different. The guarantor sets the general requirements for the portfolio and the compliance criteria for the client and for obtaining the credit. The analysis of the credit, as well as the verification of compliance with the set criteria, is carried out solely by the bank. The advantage of a portfolio guarantee is that several loans can be covered by a so-called "umbrella guarantee", which makes the lending process easier and faster. As an entrepreneur, you don't have to go to the organisation offering the portfolio guarantee, pass a check, waste time, conclude a contract and significantly pay a guarantee fee. You only work with us. In some cases, you may not even know that, to reduce risk, the loan is placed under a portfolio guarantee. But in the case of the EIB, the general terms and conditions of the loan contract with maib will specify that the portfolio guarantee covers the loan.
When did maib sign the portfolio guarantee agreement with the EIB?
On April 10 this year, the portfolio guarantee agreement became effective until 01.01.2036, so we are talking about guarantees for short and medium-term loans and loans of up to ten years.
What's the advantage for me as an entrepreneur? Does the EIB guarantee mean my loan application is automatically accepted?
As a lending institution, we routinely check the customer. As I said, we will check the eligibility criteria for the EIB guarantee. In addition, we are also responsible for the quality of the lending transactions vis-à-vis the EIB because the EIB does not check before granting a loan. But because of the portfolio guarantee, we as a bank benefit from the fact that we can lend when, for example, you don't have enough collateral for a loan. And this is a direct gain for you. In an "ordinary" situation, we would be forced to refuse a loan or reduce the amount or the term. We can grant a loan with a portfolio guarantee when we think it appropriate, but you don't have the necessary collateral.
And I pay no extra fee for this guarantee?
No.
What types of loans are covered by the portfolio guarantee?
There are no loan restrictions. These include working capital financing, investment loans, and even revolving lines of credit and overdrafts. In addition, it is possible to refinance a loan issued by another financial organisation. But you won't get an EIB-guaranteed loan if, for example, you are in the tobacco trade. Such restrictions also apply at maib. We will not grant such loans as a bank focused on sustainable development.
I recently interviewed the director of HUB Nord from maib. He was talking about a loan for installing solar panels, and a large amount was granted, although the company had no collateral to obtain such a loan. Does this loan qualify under the portfolio guarantee program?
I should clarify more details before answering about this specific loan. But in principle, you could have received such a loan under the Portfolio Guarantee Program.
So, do entrepreneurs now have more possibilities to get a loan in terms of amount or term if their collateral is insufficient?
Yes, and this also applies to unsecured loans.
How can I find out about this opportunity?
Just contact maib for a loan. Our team will inform you about this opportunity.
What is the maximum loan amount that such a guarantee can secure?
The maximum loan amount for a single borrower is 3 million euro. The EIB portfolio guarantee, therefore, applies to all segments of micro, small, and medium-sized enterprises as well as large enterprises. I point out once again that loans benefiting from a portfolio guarantee are granted at the bank's decision. There is no need to wait for the EIB's confirmation, like with an individual guarantee. Thus, the borrower also benefits in terms of the loan application's processing time.
I understand. Is there anything else I should keep in mind?
We have covered all the main points. I want to add that the maib partnership with the EIB on the portfolio guarantee expands the possibilities for Moldovan enterprises to access loans for innovative products, particularly 'green loans', which will undoubtedly contribute to the country's economic development and the transition to a sustainable economy.
