The first companies to benefit from the new credit facility in the portfolio of the Bulgarian Development Bank Group have now been approved. BDB Micro Finance gave the green light to three start-ups under its programme which finances social enterprises and start-ups. Their respective lines of business are food retail, import of goods for babies and young children, and festival organisation, and the total amount of loans approved stands at BGN 133 000. Loan agreements are expected to be finalised before the year is out.
The New Beginning Programme is implemented by the BDB Micro Finance in partnership with the Fund of Funds, following the signing of a micro-financing guarantee agreement between the two institutions concerning the implementation of a First Loss Portfolio Guarantee. Eligible borrowers include start-ups, including entrepreneurs from certain vulnerable groups such as people with disabilities, those unemployed for more than six months, and young people up to the age of 29. The focus of the credit facility covers also social enterprises, the so-called mission-driven businesses.
BDB Micro Finance provides investment and/or working capital loans of up to EUR 50 000 (BGN 97 791) on preferential terms, with the possibility for a long grace period and at interest rates that are 25 % below the standard lending terms provided by the financial institution. The resources made available by the Fund of Funds are intended for guarantees under the Programme in the total amount to BGN 1 million, and the volume of loans to final recipients is expected to reach BGN 5 million.
The First Loss Portfolio Guarantee for Micro Lending is a financial instrument offered by the Fund of Funds and is implemented using funding from the Operational Programme for Human Resources Development 2014—2020 which is co-financed from the European Social Fund. It will be implemented alongside the other currently active micro lending instruments which have already been placed on the market by First Investment Bank AD, Microfund AD, SisCredit AD and UniCredit Bulbank AD.
