News and Analysis
The Fund of Funds Has Launched a Procedure to Select Intermediaries to Implement the Risk-Sharing Micro-Finance Facility Financial Instrument
Public Funds in the amount of BGN 26.4 million targeted at start-ups and social enterprises
The Fund of Funds has launched a second tender procedure to select financial intermediaries to implement the Risk-Sharing Micro-Finance Facility Financial Instrument under Operational Programme Human Resource Development (OPHRD), co-financed by the European Structural and Investment Funds. Its budget amounts to BGN 26.4 million and is divided into nine lots, with financial resources ranging from BGN 1 million to BGN 6 million, to be disbursed in the form of micro loans.
The financial instrument aims to enhance access to financing that is designed to support the establishment and development of start-ups. A part of the programme allocates financing to enterprises owned by persons from certain vulnerable groups (unemployed for over 6 months, young people aged 29 or less, and people with disabilities) and to social enterprises. The financial instrument will attract additional private capital aimed at implementing public policies for the labour market. The new award procedure has updated parameters in terms of the requirements to financial intermediaries concerning a minimum co-financing rate, and eligibility conditions and security to be put up by final recipients, etc. In addition, the financial instrument will help improve employment opportunities for people with disabilities and boost corporate social responsibility.
The maximum financing amount provided by the Fund of Funds can be up to 90 % of the size of each loan. The financial intermediaries are required to secure the remaining 10 %. Resources from the Fund of Funds accrue zero interest, while the co-financing from the intermediary is provided at market interest rates, so that the final recipients will be charged a weighted average rate, which is significantly more favourable than the market rate. The Risk-Sharing Micro-Finance Facility will finance acquisition of tangible and non-tangible assets; working capital in connection with business development or expansion of the operations of the enterprise or the self-employed person; development and improvement of skills of the workers in the micro enterprise or the entrepreneur, in case of self-employment. The size of the micro loans will range from BGN 5 000 to BGN 48 895 or its equivalent in euros. The loans can have a maturity term of up to 10 years and a grace period of up to 2 years for the loan principal.
For further information and questions about the launched procedure, you can contact the Fund of Funds’ team by calling +359 2 801 40 50 or by e-mail at firstname.lastname@example.org.