February 28 (SeeNews) - The European Investment Fund (EIF) said that it has signed three new guarantee agreements with Bulgarian lender Unicredit Bulbank, United Bulgarian Bank and ProCredit Bank, in support of fast-growing documentary finance activity in Bulgaria.
Under this instrument, the total credit portfolio of the three lenders is expected to reach 200 million euro ($220.8 million), with the EIF guaranteeing 50% of the credit risk in each credit line, the EIF said in a statement on Thursday.
The guarantee is capped at 25% losses in the portfolio.
The lenders will finance Bulgarian small enterprises and small mid-caps with documentary credit lines such as letters of credit, payment guarantees, advance payment guarantees, performance bonds and other.
Bulgaria’s Ministry of Economy and the EIF have decided to launch the pilot guarantee product using reflows under the Joint European Resources for Micro to Medium Enterprises (JEREMIE) initiative in Bulgaria, the financial institution said.
"Using repayments from earlier risk-sharing and equity financial instruments under the JEREMIE programme in Bulgaria, we are now able to extend a new guarantee facility that will provide small companies with access to more complex and efficient financing products," European Investment Bank (EIB) vice-president Lilyana Pavlova said.
The EIF, part of the European Investment Bank Group, focuses on supporting micro, small and medium-sized businesses by helping them to access finance.
($ = 0.9057 euro)
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