19.11.2025

Brief theoretical considerations regarding legislative inconsistencies within the RURAL INVEST government program

RURAL INVEST is a multi-year government program to support businesses in agriculture, aquaculture, fisheries, and the food industry. Its purpose is to facilitate access to financing by providing state guarantees of up to 90% of the loan amount for investment loans and working capital loans/credit lines. The program was approved by Article 4 of Government Emergency Ordinance No. 24/2022 as a post-pandemic support measure.

The implementation of the program is regulated by subsequent acts: Order of the Minister of Finance No. 1073/2022, which approved the Convention for the implementation of the RURAL INVEST Program and mandated the Rural Credit Guarantee Fund (hereinafter "FGCR") to grant guarantees on behalf of and for the account of the state, as well as Joint Order of the Minister of Finance and the Minister of Agriculture and Rural Development No. 2119/274/2022, which approved the Procedure for granting state guarantees and the guarantee and implementation agreements for RURAL INVEST.

The FGCR therefore acts as the state's agent, with the role of granting state guarantees, monitoring guaranteed loans, managing guarantee payment requests, and initiating the recovery of amounts paid by the state.

The program is similar to other SME Invest guarantee schemes: the bank finances the eligible beneficiary, the state (through the Ministry of Finance) guarantees part of the loan, and the beneficiary also receives a grant (state aid in the form of interest/commission subsidies). If the beneficiary fails to meet its payment obligations, the state guarantee covers part of the loss, and the state (through ANAF) subsequently recovers from the beneficiary the amount paid as a guarantee to the institution that financed the loan. The FGCR concludes guarantee agreements with participating banks and monitors the use of guaranteed financing in accordance with the approved state aid scheme.

Early maturity of the loan is the mechanism by which the bank declares the loan fully due before the originally agreed term, usually as a result of the borrower's failure to pay the loan installment(s). Upon declaration of early maturity, the entire loan becomes due, and the borrower is obliged to pay it in full.

From the perspective of the financing bank, the declaration of early maturity marks the moment when credit risk arises: the fact that the borrower has not fulfilled their main obligation—namely, to pay the loan installments—indicates a high probability that the bank will not be able to collect the full balance of the loan, as per the contract. Therefore, the bank will proceed to implement all available protective measures – both the enforcement of the guarantees and any assets of the debtor and, in the case of a state-guaranteed loan, the triggering of the guarantee mechanism.

In practice, banks include clauses in loan agreements that allow them to declare the loan due early after a certain number of days of arrears (often 60 or 90 days of late payment). The declaration of early maturity is notified to the borrower, who is summoned to pay all amounts due immediately. Thus, for banks participating in the RURAL INVEST program, declaring a state-guaranteed loan due early means that a large part of the loss will be covered by the state guarantee, through the mechanism of a payment request addressed to the FGCR.

It is important to note that the guarantee mechanism is triggered at the initiative of the bank: it must submit a request for payment of the state guarantee to the FGCR, accompanied by supporting documentation (the loan agreement, proof of attempts to recover the outstanding amounts from the debtor, etc.). Only after the FGCR has reviewed and approved this request will the Ministry of Finance pay the bank the value of the guarantee. Subsequently, the state becomes the creditor of the principal debtor for the amount paid and will recover its claim through the ANAF. Ideally, from the bank's perspective, this mechanism should ensure coverage of the loan granted after the risk has occurred.

However, in the case of the RURAL INVEST program, there is a gap between the contractual moment of risk (the early maturity declared by the bank) and the procedural moment when the bank can actually obtain payment of the state guarantee.

The secondary legislation of the RURAL INVEST Program sets out in detail the conditions and deadlines under which a bank may submit a request for payment of the state guarantee to the FGCR. These provisions, contained in the Procedure approved by Order No. 2119/274/2022 (Annex No. 2 to the Order, hereinafter referred to as the "Procedure"), stipulate in Article 34(6) that the bank may not request the state guarantee earlier than 30 days from the date on which the loan was declared due and payable. that the bank may not request the state guarantee earlier than 30 days from the date on which the early maturity of the loan was declared.

Thus, although the declaration of early maturity renders the entire obligation due and payable on the same day and would justify, from the perspective of the credit agreement, immediate steps to enforce the guarantee granted by the state, Article 34(6) of the Procedure provides for a period of 30 days from the declaration of early maturity before the bank can proceed with the application; only after this period has elapsed can the bank submit the application. However, there are situations where the nature of the loan granted implies a legislative mismatch, because in the case of revolving credit agreements, the date of full maturity coincides with the final maturity date.

However, there are situations in which the nature of the loan granted implies a legislative mismatch, because in the case of revolving credit agreements, the full maturity date coincides with the final maturity date of the loan. In these cases, the full maturity can only be declared at the final maturity of the facility, and only from that moment does the minimum period of 30 days provided for in Article 34(6) of the Procedure begin to run. Therefore, although from a contractual point of view the bank declared early maturity at maturity, from a procedural point of view the right to submit the payment request to the FGCR arises after the expiry of the 30-day period from the declaration of early maturity.

In this context, the duration of the guarantee agreement (which is the same as the duration of the credit agreement) cannot be interpreted as an absolute impediment obliging the bank to submit the request before it becomes admissible under Article 34(6). If the risk covered by the state guarantee arises only at the final maturity date, then even if the date until which the guarantee agreement was valid coincides with that date, the bank is not obliged to submit the request to the FGCR before the 30-day period provided for in Article 34(6) of the Procedure has elapsed. If the risk covered by the state guarantee arises on the final maturity date, then even if the date until which the guarantee contract was valid coincides with that day, the procedural right to submit the request arises only after the expiry of the minimum period of 30 days provided for in Article 34(6).

Therefore, an interpretation according to which the payment request can only be submitted until the date mentioned as the termination date of the guarantee contract, and any subsequent request should be considered late, disregards the legislative inconsistency we are referring to.

In conclusion, the RURAL INVEST Program presents a legislative inconsistency between the moment when the payment request can be submitted to the FGCR and the moment when the guarantee contracts cease to have effect. Therefore, making the validity of the payment request conditional on its submission by the deadline determined by the termination of the contract renders Article 34(6) of Order No. 2119/274/2022 meaningless, but at the same time indicates that the legislator did not take into account the particularities of certain types of loans when regulating the guarantee mechanism. 

An article signed by Mircea-Bogdan Popescu, Partner (bpopescu@stoica-asociatii.ro ) - STOICA & ASOCIAȚII.