Fund of funds and the Managing Authority of the Operational Programme "Human Resources Development" 2014-2020 (OPHRD) signed an Additional Agreement for reinvesting residual resources under the Operational Programme for Regional Development 2014-2020. The agreement was signed by the Minister of Labor and Social Policy Ivanka Shalapatova on behalf of the Managing Authority, and by Victoria Hristova and Biser Petkov, Executive Directors and members of the Management Board of Fund of Funds.
The reinvestment funds represent receipts from repayment installments and released guarantees related to previously provided financing to final beneficiaries within the framework of the first investment cycle of OPRD 2014-2020.
An expected recovered and/or released resource from financial instruments under OPRD amounting to BGN 19.1 million is predicted to be reinvested after the end of the eligibility period through financial instruments in accordance with the objectives of OPRD until the end of 2031. An analysis of the performance of the existing two instruments under OPRD 2014-2020 - "Portfolio guarantee with loss ceiling" and "Micro crediting with shared risk" - establishes the need for continued support for startups and social enterprises. The signing of the additional agreement addresses this finding, and through it, the reinvestment resource will enhance support for target group final beneficiaries and contribute to improving their sustainability in the context of economic challenges. As before, financial instruments will continue to provide facilitated access to financing for social enterprises and startup entrepreneurs - final beneficiaries who would find it difficult to obtain credit from the free financial market without public support due to a lack of financial history, insufficient collateral, high-risk profile and other reasons.
The proposed structure of financial instruments with recovered and/or released resources under the signed Additional Agreement covers debt financial instruments throughout the operation of the existing two products under OPRD 2014-2020 - "Micro crediting with shared risk" and "Portfolio guarantees with loss ceilings for micro crediting", where financing is entirely from a program-recovered resource. The main parameters such as structure, target final beneficiaries, expected social effects, amount of support provided remain unchanged. Eligible activities also stay identical to those of OPRD 2014-2020. Financing, as before, is provided in the form of an investment or revolving credit of up to BGN 100,000 with a repayment period of up to 10 years and with relaxed requirements - lower interest rates, smaller collateral, possibility of a grace period. Final beneficiaries who meet the eligibility criteria will be able to benefit from the reinvestment funds by December 31, 2031.
By signing the Additional Agreement and the availability of new opportunities for redirecting recycled resources to enterprises in need of support, the development of small businesses, social inclusion and promotion of the social economy will be catalyzed, as well as the reduction of unemployment and the full participation in the labor market of people with specific needs.
