The Fund of Funds opened the applications received in response to the public procurement call for the Lending in Rural Areas instrument. The resources are made available by the Rural Development Programme 2014—2020 co-financed from the European Agricultural Fund for Rural Development.
The resources available for this new product amount to BGN 38.3 million allocated among 3 lots. Future financial intermediaries are expected to top up the public resources with private capital, leveraging the total loanable funds to over BGN 60 million.
Once the instrument is launched, low-interest loans will be available to agricultural producers and other businesses in rural areas. Farmers will be able to borrow up to BGN 2 million, and access to loans under more favourable terms will be open also to enterprises involved in non-agricultural business activities in rural areas, including manufacturing, trade, handicrafts, any type of services such as accounting, utility, repairs, veterinary, IT, care for the elderly. The money can be used both for investment and for working capital.
The Fund of Funds will co-finance two types of low-interest loans: top-up of project grants already awarded (with the FoF participating at up to 50 % of the loan amount) or stand-alone loans ((with the FoF participating at up to 70 % of the loan amount).
Preferential terms will include below-market interest rates, relaxed application requirements, lower surety requirements, longer grace periods, enhanced access to financing for specific target groups (small farm holdings, young farmers). The allocated funds are expected to provide support to at least 130 entities doing business in agriculture or in processing agricultural produce, and to non-agricultural businesses operating in rural areas.
The following institutions applied for participation within the announced application period:
DSK Bank EAD, for all the lots;
InvestBank AD, for all the lots;
First Investment Bank AD, for all the lots;
SysCredit AD, for lot 1.
The next step is to consider the submissions and select applicants to be invited to lodge their initial bids.
