Romania Financial Sector Assessment

This study discusses constraints and opportunities of the regulatory framework for microfinance in Romania.

MFIs in Romania face many obstacles such as taxation issues, lack of access to capital and lack of training and technical assistance. Other constraints include:

• Commercial banks involved in microfinance are constrained by tight regulatory and oversight restrictions;
• MFI clients have to deal with lack of affordable funds, and unclear and complicated legislation;
• Clients lack basic management fundamentals and coherent business strategies for long-term sustainable growth;
• Well-known and well-structured MFIs are limited in number;
• MFIs have limited access to traditional bank loans due to lack of a credit history of micro and small companies, lack of collateral and loan amounts that are unprofitable for banks.

Finally, the new Microfinance Legislation that was passed in 2006 and the newly formed Microfinance Coalition have opened up opportunities for Romanian MFIs helping them build capacity and provide training.