Banca Transilvania: Estimating the impacts of a social bonds portfolio in Romania

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December 2024

Banca Transilvania, one of the largest banks in Romania, provides loans to micro-, small-, and medium-sized enterprises (MSMEs) across the country. Cambridge Econometrics was commissioned to analyse the employment and economic output impacts of MSME loans across Romania. Results found that in 2023, these loans had directly and indirectly contributed to nearly 11.5bn Romanian lei (RON) of GVA and supported 95,900 jobs. 

Aim of the report

For many years Banca Transilvania has been providing loans to MSMEs in Romania, which employ 65% of the country’s workforce and account for 99.8% of all non-financial sector companies. 

The bank commissioned Cambridge Econometrics to analyse, for the first time, the impacts of the loans that comprise their social bonds portfolio, aiming to understand the economic benefits of these loans on output and employment, and the range of people affected across society from different regions and socio-economic statuses, including females and youths who own MSMEs.

Approach

Our team of economic impact assessment experts used Cambridge Econometrics’ Romanian input-output (I-O) model to estimate the total economy-wide impacts of Banca Transilvania’s MSME loans. The model used in this project builds on more than 40 years of Cambridge Econometrics’ expertise and helped estimate not just the direct impacts of loans (occurring from businesses spending those loans in the economy), but the indirect impacts from stimulus through supply chains and induced impacts from further economic activity through employee spending.

Our analysis examined the geographic distribution of Banca Transilvania’s MSME loans in Romania, the number of firms that received the loans, and the workers employed at those firms. The results were split by customer segment, which included loans to female-owned MSMEs, youth-owned MSMEs, start-ups, self-employed farmers, and other MSMEs. 

Characteristics of the social bond portfolio

  • The portfolio included loans to more than 61,000 MSMEs in every region of Romania, employing nearly 394,000 workers.
  • Many of these loans went to MSMEs located in socio-economically disadvantaged areas, defined by counties with GDP per capita below a threshold specified by the bank. The loans were valued at nearly RON 14.9bn as at 31 December 2023.
  • The majority of these loans fell into the ‘Other MSMEs’ category, which included firms located in disadvantaged areas, followed by loans to female-owned MSMEs, start-ups, self-employed farmers, and youth-owned MSMEs.

Impacts of the MSME loans:

  • Loans to female-owned MSMEs contributed to RON 2,146.5m GVA impacts and supported 18,300 workers.
  • Loans to youth-owned MSMEs contributed to RON 71.5m GVA impacts and supported 500 workers.
  • Loans to start-ups contributed to RON 705.7m GVA impacts and supported 4,700 workers.
  • Loans to self-employed farmers contributed to RON 260.5m GVA impacts and supported 5,400 workers.
  • Loans to other MSMEs contributed to RON 8,300.5m GVA impacts and supported 67,100 workers.

Discover more insights and read the full report here.

For more information about our social bonds work please contact Head of Economic & Social Policy Division, Shyamoli Patel.

Shyamoli Patel Head of Economic & Social Policy Division [email protected]