Micro credits in Bulgaria
The support and financing of Bulgarian small and medium-sized enterprises (SME) is a mission of the Bulgarian Development Bank Group (BDB Group) and its two subsidiaries: National Guarantee Fund EAD (NGF/the Fund) and Jobs Micro Financing Institution (MFI).
The Bulgarian Development Bank AD was established on 11 March 1999 as a joint-stock company under the name Encouragement Bank AD. The mission of Bulgarian Development Bank AD is to provide support and financing of SME, refinancing Bulgarian banks granting loans to SME, refinancing foreign banks providing funds to purchasers of goods and services, provided by SMEs. The Republic of Bulgaria, represented by the Ministry of Finance, owns the majority shareholding (99.9999%) of the Bank’s capital.
National Guarantee Fund EAD is established on 12 August 2008. The company is fully owned by the Bulgarian Development Bank AD. The Fund can be a guarantor for up to 50% of the one SME’s loan. The maximum value of one loan guarantee must not exceed 10% of the Fund’s capital.
Jobs Micro Financing Institution is a successor of JOBS Programme launched in 2009 as a joint project of the Ministry of Labour and Social Policy, the Ministry of Economy and the United Nations Development programme (UNDP). Under the JOBS programme a network of 42 business centers was set up throughout the country, mostly in rural regions. These business centers – business incubators provide financial /loans and leasing/ and non-financial /consulting, information, education/ services to SMEs – srarters mostly. For nine years of its existence, JOBS has contributed to and assisted in the creation of 33 500 long-term jobs. As the programme expired in 2009, the Bulgarian Development Bank AD established microfinancing daughter company to ensure the continuation of the JOBS Program. MFI’s scope of activities includes as follows:
· Microfinansing – 25 000 euro maximum value of a loan
· Operational and finance lease
· Sale and purchase of assets
· Consultancy
On 17th of June 2002 Sofia Municipal Council established The Municipal Guarantee Fund for Small and Medium Enterprises (MGFSME). Fund’s objective is to implement the policy of Sofia Municipality for supporting the small and medium business in it’s territory by guaranteeing a part of credit risk on loans, extended by financial institutions to small and medium enterprises, registered or developing their activity in the territory of Sofia Municipality.
MGFSME achieves its objectives by concluding agreements with commercial banks and other financial institutions that realize special programs for SME lending. Providing with guarantees of MGFSME on loans extended to SMEs is done in two ways:
- After a preliminary examination of the financial status of the company MGFSME directs it to bank-partners with an approval letter in which the Fund notifies the banks that the company covers the formal conditions for providing a MGFSME guarantee on the bank’s loan;
- Bank-partners address to the Fund a proposal for guarantee support together with the documents concerning the approved loan.
For further information please visit http://www.bdbank.bg and http://www.ogf-sofia.com/; offices and web-sites of Bulgarian commercial banks.