Bulgaria’s Development Bank Opens 10 Mln Euro Credit Line for On-lending to SMEs

The ten-year loans of up to one million euro will have a five-year grace period and a maximum interest rate equivalent to the six-month Euribor plus four points, the bank said in a statement.

The money will go for mid- and long-term investments, pre-export financing, as well as for projects supported by the European Union's structural funds.

So far, 17 commercial banks have shown interest in the credit line.

The launch of the credit line comes as a result of the government's efforts to cushion the impact of the global financial crisis. Access to credits has become more difficult for SMEs after banks raised the interest rates and grew more cautious.

The government also plans to gradually increase Development Bank's capital by 500 million levs, the statement said, adding that the bank's capital will be raised by 100 million levs this month.

Development Bank, in which the state holds a 99.97% stake, is the successor of Encouragement Bank. The bank was renamed earlier this year to indicate it will function as an export-promoting development bank.

($=0.792 euro)