ProCredit: We tried to promote RON lending and faced problems

ProCredit, a small bank specialising in lending to small entrepreneurs, was forced to rethink its lending policy, shifting from granting RON-denominated loans to euro-denominated ones, as it has faced major problems in refinancing its portfolio after the cash crunch of the 2008 autumn. "(...)We had a shock and it took us six months to correct it. We now have a balanced account, half RON loans, half euro ones," says Gian Marco Felice, ProCredit Bank general manager. ProCredit went into the red in 2009 on the soaring funding costs, to which bad-loan provisions were added. ProCredit has a small loan portfolio, worth as much as 200m euros, in the context where the average value of loans granted is also low, of around 5,000 euros. "The euro will be the dominant currency in the following years. We've decided it's better for us to also bet on the euro," Felice says. The bank has easy access to euro funding from its shareholders, but is also attracting foreign-currency deposits on the Romanian market.