The German economic model is one that is characterised by a strong, competitive sector, composed of a large number of small and medium enterprises, or Mittelstand, as these companies are known in Germany. This sector has greatly contributed to the economic growth, as well as to the stability of the country over the years. Typically, they are family-run businesses, which take a long-term perspective of the company’s development and its results, they are businesses that think in generations rather than on short-term profit maximisation.
SMEs not only provide the vast majority of employment, they also play an important role in the educational system. In Germany, the so-called dual professional education system combines theoretical and practical training and fosters the creation of a highly skilled workforce.
Moreover, due to their number and size, SMEs ensure that an economy can adapt to changing market conditions. They spur competition and can counterbalance potential situations where monopolies or oligopolies threaten to stifle the free-market. SMEs also ensure the openness of a country, driving exports and imports as well as cross-border investments. In doing so, the German Mittelstand also plays an important role in fostering investments in Romania.
The importance of SMEs in Romania is also high. Most employees work for small and medium-sized companies (67% in 2014); moreover, the growth of employment and value-added in the SME sector is quite high in Romania and is above EU average.
The ProCredit group is a German-led group of banks that explicitly focuses on SMEs, a layer of the economy that is key to achieving economic sustainability, social responsibility and political stability. These enterprises possess the skills, the passion and entrepreneurial drive to create jobs and generate strong competitiveness that can bolster the underlying political economy of the country. ProCredit has been working with SMEs in various Eastern European countries for 20 years. The majority of ProCredit bank’s client companies are family owned, with unique experience and traditions. They show great commitment to the wider community and take a long-term view of company development. ProCredit Bank Romania – the only 100% German-owned bank in the country – supports the development of the SME segment by providing an efficient, modern way of banking.
What does this mean? First and foremost, banking is a “people business”. SMEs have the right to expect to be served by a competent and dedicated professional. Not by a person who is driven by the pressure to meet targets by selling the maximum possible, regardless of the fact that a client might become over indebted as a result, but by a person who is intrinsically motivated by the value and importance of the work that they are doing.
The ProCredit group works closely with a number of European Institutions, such as the EIB and EIF. These institutions help businesses move forward by providing finance for the future modernisation and development of ProCredit Bank’s client companies, usually at advantageous conditions. ProCredit Bank puts together a tailored package of lending and banking services for its clients, supporting their long-term plans. It was not by chance that the ProCredit group successfully weathered the financial crises together with the vast majority of its clients. The low levels of arrears and non-performing loans in the group’s portfolio are proof of this.
ProCredit’s investment in providing the most up-to-date banking services can be seen throughout the branch network, with its modern and comfortable 24/7 Zones. These self-service areas have been especially designed to meet the needs of business clients and the cutting-edge technology makes a wide range of automated cash and e-banking transactions possible.
It is not easy to replicate the German model, but if that’s what you’re aiming for, German expertise is a valuable asset in moving the process forward.