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Bulgaria to provide further 49 mln euro in SME growth funding

Bulgaria to provide further 49 mln euro in SME growth funding unsplash.com

SOFIA (Bulgaria), May 10 (SeeNews) - Bulgaria will disburse an additional grant of 96.2 million levs ($51.95 million/ 49.2 million euro) to secure liquidity and provide funds for investment and growth to small and medium-sized enterprises (SMEs), the innovation ministry said on Tuesday.

In the context of current inflation levels, the funding will allow the seven local banks acting as financial intermediaries to offer new loans without collateral to Bulgarian businesses, thus enabling them to secure sufficient working capital as well as funds for new investments, the ministry said in a press release.

The latest credit resource will bring to 240 million levs the total size of the financial instrument, which will be administered by the ministry's fund manager, the Fund of Funds.

Thus, Bulgarian SMEs will have a significantly easier access to business loans, with the possibility for a 12-month grace period on the principal and financing without material collateral requirements as well as shorter periods of obtaining loan approval.

The grant will be channelled through the operational programme Recovery under the European Commisssion's Recovery Assistance for Cohesion and the Territories of Europe (REACT_EU) mechanism for additional cohesion funding, which extends COVID-19 recovery measures.

The participating lenders are Tokuda Bank, First Investment Bank [BUL:FIB], Raiffeisenbank Bulgaria, Postbank, UBB, DSK Bank and UniCredit Bulbank.

The total amount of business loans to be provided to Bulgarian SMEs under the operational programme Recovery since its inception in summer 2021 is expected to reach 700 million levs, the ministry said.

Close to 900 local SMEs have so far received support, with some 400 million levs in agreed business loans made possible by 131.7 million levs from the guarantee instruments provided by the Fund of Funds.

(1 euro = 1.95583 levs)

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