EUR 385 million for Bulgarian SMEs as EIF signs first SME Initiative agreements with five commercial banks
The European Investment Fund (EIF), part of the European Investment Bank Group, has signed the first SME Initiative guarantee transactions in Bulgaria, with the following commercial banks: United Bulgarian Bank, Raiffeisenbank Bulgaria, UniCredit Bulbank, Procredit Bank and CIBANK.
These agreements aim to improve access to finance for over 4,000 Bulgarian SMEs, including micro companies and start-ups, by ensuring that the banks committed to the SME Initiative offer financing at lower interest rates.
The five guarantee transactions will generate a total of EUR 385 million of finance to SMEs in Bulgaria, covering two thirds of the target EUR 600 million of total funding available under the initiative. These five transactions were signed only 6 months after the launch of the initiative in Bulgaria.
The SME Initiative is a joint programme blending support from the European Commission, EIB Group and Member States with a view to stimulating SME financing by providing partial risk cover for SME loan portfolios originated by financial entities. Alongside European Structural and Investment Funds contributed by Member States, the SME Initiative is co-funded through Horizon 2020 resources as well as benefitting from EIB Group resources.
Minister of Economy of the Republic of Bulgaria, Bojidar Loukarsky said: "I am happy that the hard work of all the stakeholders in the recent months on ensuring the implementation of the SME Initiative in our country paid back and Bulgarian SMEs will benefit of an improved access to finance which is crucial for enhancing their investment activities. SME Initiative is an important instrument that will allow the Ministry of Economy to further strengthen its policy approach towards raising the competitiveness of the Bulgarian business.”
Commenting on the transaction, EIB Vice-President, Andrew McDowell said: “The EIB Group is fully committed to rolling out the SME Initiative and we are pleased to be announcing, together with the Bulgarian authorities, that the first commercial banks in Bulgaria will now start providing finance for SMEs. All of the five banks are important SME lenders in Bulgaria and via the SME Initiative will be vital partners in providing support for entrepreneurs wishing to grow and develop their business. We are confident that these agreements will deliver lasting benefits to Bulgarian businesses.”
EIF Chief Executive, Pier Luigi Gilibert said: “I am delighted that the first five SME Initiative agreements have been signed so rapidly in Bulgaria. These transactions will generate more than EUR 600 million of SME financing over the coming years. The combination of European Structural and Investment funds, EU Horizon 2020 and EIB Group resources allows EIF to provide risk-sharing and capital relief to financial intermediaries, for the ultimate benefit of SMEs.”
Commenting on the signature, European Commissioner, Corina Creţu said: “The signature of these agreements shows that the SME initiative in Bulgaria is delivering on its promises: to give fresh loans to small businesses and to support EU-wide goals of growth and job creation. I wish to see many other Member States follow the example of Bulgaria.”