September 18, 2003

SEVEN MILLION DOLLARS FOR HOUSES: USG LOAN GUARANTEE TO BENEFIT HUNDREDS OF ROMANIAN FAMILIES

On Thursday, September 18, U.S. Ambassador Michael Guest announced the guarantee by the U.S. Government of a $7 million loan for residential mortgages in Romania. This loan will be disbursed by Domenia Credit, the first mortgage company in Romania, which has just been established by the Romanian American Enterprise Fund (RAEF).

U.S. assistance to the mortgage market in Romania began three years ago. The creation of Domenia Credit, dedicated solely to providing mortgages for Romanians, is a direct result of the partnership between RAEF, Shorebank Advisory Services (SAS), Raiffeisen Bank, and the U.S. Government. SAS and RAEF sought additional private capital for residential mortgages and the U.S. Government agreed to guarantee a $7 million loan from Raiffeisen Bank to RAEF. The loan will help Romanians reach their goal of home ownership and create more jobs in the construction and housing industries.

This innovative partnership is a model of cooperation between donors and private banks to strengthen Romanian financial institutions. The U.S. Government anticipates that in the future similar partnerships will increase financial resources for many more Romanian families to own homes.

The U.S. Government will continue to support the introduction of new financial instruments and the development of the secondary mortgage market.

Representatives from the World Bank, the International Finance Corporation, the European Bank for Reconstruction and Development, Deutsche Investition und Entwicklungsgesellschaft, and the National Bank of Romania, along with representatives from the Ministry of Public Finance and the Ministry of Transportation, Construction and Tourism attended the event.

Contacts:
U.S. Government:
Corina Mararu Tel: 410 1222; Fax: 410 1202; e-mail:cmararu@usaid.gov
Domenia Credit:
Carmen Retegan Tel: 253 2644; Fax: 252 2483; e-mail:Carmen.Retegan@domenia.ro