European Small and Medium Enterprises (SMEs) in Romania receive more than €600 million in funding, thanks to the InvestEU guarantee supported by the Recovery Plan

European Small and Medium Enterprises (SMEs) in Romania receive more than €600 million in funding, thanks to the InvestEU guarantee supported by the Recovery Plan

The InvestEU programme, funded in part through Romania's National Recovery and Resilience Plan (PNRR), has been designed to boost strategic investments across Europe, including those benefiting Small and Medium-sized Enterprises (SMEs) in Romania. However, specific details about how the InvestEU guarantee instrument directly contributes to SMEs in Romania since 2023 are not widely available.

The Two Key Pillars of the InvestEU Programme

The Sustainability Guarantee and the Competitiveness Guarantee are the two key pillars of the programme. The Sustainability Guarantee supports environmentally friendly and inclusive investments, while the Competitiveness Guarantee aims to improve access to credit across a broader range of companies and sectors.

The Role of the European Investment Fund (EIF)

The European Investment Fund (EIF) manages direct guarantees granted to local financial intermediaries, enabling them to offer improved financing terms, such as lower interest rates, reduced collateral and down payment requirements, and longer repayment periods.

The Active Programme Continues to Support Bank Lending

Twelve banks are currently disbursing loans under the programme, with the average loan issued being around EUR 300,000. The programme is still active and will continue to support bank lending to SMEs and individuals.

The Impact on Romanian SMEs

The programme could enhance access to financing for Romanian SMEs by providing guarantees that mitigate risks for lenders. By promoting disruptive innovation, InvestEU can encourage Romanian SMEs to develop new products, services, or business models. SMEs in Romania may also benefit from the programme's focus on strengthening economic resilience, which is crucial for their sustainability and growth.

However, the exact contributions to SMEs in Romania since 2023 would depend on how Romanian authorities have chosen to allocate funds from the PNRR and how SMEs have accessed these resources. More specific information would require direct data from the Romanian government or the European Commission regarding the implementation of InvestEU funds in Romania.

The InvestEU Programme: A Building Block for SME Success

The InvestEU programme builds on the experience gained through the SME Initiative launched in 2016. By providing budgetary guarantees and financing for financial instruments, InvestEU supports competitiveness and resilience across Europe, including in areas like innovation and sustainability. While not specifically detailed for Romania, InvestEU's broader aims include supporting SMEs through various financial instruments and risk-sharing mechanisms, helping reduce financial risks for companies, including SMEs, and facilitating access to capital for innovative projects.

The InvestEU programme with PNRR funding started in 2023, marking a significant step forward in supporting strategic investments in Romania. The Romania compartment of the InvestEU programme has a total envelope of EUR 672 million. The programme's potential impact on Romanian SMEs is vast, and as more data becomes available, we will gain a clearer picture of its success in supporting the growth and development of these vital businesses.

[1] European Commission. (n.d.). InvestEU – Investing in a Sustainable Europe. European Commission. Retrieved from https://ec.europa.eu/info/business-economy-euro/business-environment-business-models/business-finance-investment/investeu_en

[4] European Commission. (n.d.). SMEs. European Commission. Retrieved from https://ec.europa.eu/info/business-economy-euro/business-environment-business-models/business-finance-investment/sme_en

This article was written by Irina Marica. The source of the photo is N**atanael Alfredo/Dreamstime.com.

1. The Competitiveness Guarantee, one of the two key pillars of the InvestEU programme, aims to improve access to credit across a broader range of companies and sectors in Europe, which includes Small and Medium-sized Enterprises (SMEs).
2. As the InvestEU programme with PNRR funding started in 2023, the potential impact on Romanian SMEs is vast, as the Romania compartment of the programme has a total envelope of EUR 672 million, which could enhance access to financing for these businesses.

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