"Patria" fails to receive its bank license and remains an IFN

The Romanian American Investment Fund (FRAI) missed its opportunity to get involved in its third Romanian bank, after microlender "Patria Credit" (controlled by FRAI and "Balkan Accession Fund") did not receive the banking license it has requested from the NBR one year ago.

Had it received the license, this would have been the third bank FRAI has been involved in, after its previous stakes in "Banca Românească" and "Banca Agricolă".

"The letter of the Romanian National Bank confirmed the refusal to award the license for operating as a credit institution", according to data published by the Official Gazette, which also proves the fact that the institution will keep its current name of "Patria Credit Non-Bank Financial Institution".

Horia Manda, the head of Patria Credit and managing partner of "Axxess Capital", a company which manages the funds of Patria Credit, could not be contacted for a statement.

The decision of the NBR to reject the request for the granting of the bnaking license for "Patria" apparently stems from the nature of its two investors - two investment funds which by definition have a limited duration, sources from the banking sector said.

The two investment funds acquired stakes in Capa Finance, now called Patria Credit, in 2007, following a transaction which also involved a share capital increase amounting to approximately EUR 15 million. FRAI controls around 56% of "Patria Credit", while BAF holds a little over 43%.

"Patria Credit" is betting on growth in the rural area, and it expects its total loan volume to reach 24 million Euros this year. The company recently announced that it taken a 6-year USD 25 million loan from the American government agency "Overseas Private Investment Corporation" (OPIC), money which will be used to finance small and medium enterprises (including farmers), by providing loans for investments and working capital.