The European Investment Fund (EIF), part of the EIB Group, has made a deal with three commercial banks to provide €246m (£212m) to Romanian SMEs through guarantee transactions.

The EIF’s first  ‘SME Initiative’ will provide greater access to finance for 4,300 Romanian SMEs through Raiffeisen Bank, Banca Comerciala Romana (BCR), and ProCredit Bank, by ensuring the banks commit to offering lower interest rates.

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The €240m of guarantee transactions will make up almost half of the total target funding for the initiative to which the EIF has allocated €540m, under a year after it was first launched in Romania.

The SME Initiative Programme for Romania was launched in October 2016, and is funded by €100m of European Regional Development Funds (ERDF).

The EIF said contributions from the Romanian government, EIB Group funds, and EU central funds from the Horizon 2020 programme, will be leveraged with commercial lending through a risk-sharing mechanism.

EIF chief executive, Pier Luigi Gilibert said: “I am pleased that the first three SME Initiative agreements have been signed in Romania so quickly.

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“The combination of European Structural and Investment funds, EU Horizon 2020 and EIB Group resources allows EIF to provide risk-sharing and capital relief to financial intermediaries for the ultimate benefit of SMEs.”

Romania’s vice-prime minister, and minister of regional evelopment, public administration and European funds, Sevil Shhaideh said:

“I am glad to see the SME initiative delivering for Romanian small businesses.SMEs play a crucial role in the country’s economy: they provide jobs to the local community and bring innovative products to the market.

“By choosing to invest €100m of its Cohesion Policy envelope in this pioneering programme, Romania has made a smart choice that will boost the competitiveness of its economy and get its businesses the funding they need.”